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+---
+taip: TAIP-19
+title: Fee Allocation
+author: Onuwa Nnachi Isaac <isaac.onuwa@notabene.id>
+discussions-to: https://github.com/TransactionAuthorizationProtocol/TAIPs/discussions/49
+status: Draft
+type: Standard
+created: 2025-09-14
+updated: 2025-09-14
+requires: [1,7,8,12]
+---
+
+## Simple Summary
+
+A specification for allocating, recording, and settling service fees among TAP agents.
+Defines FeeReceipt and FeeBatch messages to ensure predictable, auditable, and fair incentives for authorization, routing, and execution agents.
+Enables interoperability and composability across TAP flows.
+
+## Abstract
+
+TAIP-19 introduces FeeReceipt and FeeBatch message types for allocating, recording, and settling service fees among TAP agents.
+The proposal establishes a standardized schema for fee calculation, signature verification, batching, and reconciliation.
+FeeReceipts represent single fee obligations signed using [EIP-712].
+FeeBatches aggregate receipts into Merkle proofs for scalable settlement.
+This ensures transparent and predictable incentives for agents, while maintaining composability with existing TAP flows.
+
+## Motivation
+
+As TAP adoption grows, agents play critical roles in authorization, routing, compliance checks, and execution.
+Without a standard schema for fees, participants face inconsistent compensation, risk of disputes, and lack of transparency.
+This proposal establishes a uniform fee allocation system, integrating with existing TAP messaging while remaining settlement-agnostic.
+
+## Specification
+
+### Fee Types
+
+- **Authorization Fee**: for validating or approving a transaction request [TAIP-8].
+- **Routing Fee**: for forwarding or relaying a transaction message [TAIP-12].
+- **Execution Fee**: for finalizing a transaction on a target blockchain or service.
+
+### Payment Unit
+
+- Fees may be denominated in ERC-20 tokens, stablecoins, or fiat currency codes [ISO-4217].
+- Agents must declare supported units during registration [TAIP-7].
+- Conversion into settlement assets is out of scope.
+
+### Message Types
+
+- **FeeReceipt**: describes a single fee obligation, including payer, payee, fee type, amount, unit, reference, and timestamp.
+- **FeeBatch**: aggregates multiple FeeReceipts and includes a Merkle root for verification.
+
+### Signing and Verification
+
+- FeeReceipts must be signed using [EIP-712] typed data.
+- Signatures must bind to [CAIP-10] agent identifiers.
+- Nonce or transaction reference prevents replay.
+
+### Settlement
+
+- TAP does not prescribe the settlement rails.
+- Fees may be settled off-chain via fiat, custodial ledgers, or blockchain payments.
+- FeeBatch provides an auditable record of obligations to support reconciliation between parties.
+
+### Governance Parameters
+
+- Governance may define maximum fee percentages relative to transaction value.
+- Governance may approve or revoke supported tokens.
+- Governance may require reporting intervals for FeeBatches.
+
+## Rationale
+
+Anchoring fee allocation in [TAIP-7], [TAIP-8], and [TAIP-12] ensures only valid, authorized agents may receive fees.
+Using [EIP-712] signatures ensures compatibility with wallets and SDKs.
+Merkle batching provides scalability and auditability without requiring all receipts to be stored on chain.
+
+Explicitly out of scope are: settlement rails, asset conversion, and dispute resolution — these depend on governance or bilateral agreements.
+
+## Test Cases
+
+- Generate a FeeReceipt with valid [EIP-712] signature and verify against the payee’s [CAIP-10] identifier.
+- Reject FeeReceipts with duplicate nonces (replay prevention).
+- Aggregate multiple FeeReceipts into a FeeBatch, compute Merkle root, and verify inclusion proof for each receipt.
+- Verify that `totalAmount` in FeeBatch equals the sum of all included FeeReceipts.
+
+## Security Considerations
+
+- Replay prevention enforced with nonces or unique references.
+- FeeReceipts must be signed to ensure non-repudiation.
+- [CAIP-10] identifiers must be validated to prevent impersonation.
+- Forged Merkle roots in FeeBatch must be detectable via proof verification.
+
+## Privacy Considerations
+
+- FeeReceipts and FeeBatches may reveal payer–payee relationships.
+- Use of pseudonymous DIDs may mitigate linkage risk.
+- Aggregation in FeeBatch reduces exposure of individual receipts but does not eliminate metadata disclosure.
+
+## Backwards Compatibility
+
+TAP systems that do not implement fee allocation may ignore FeeReceipts and FeeBatches.
+Existing TAP message flows remain unaffected.
+
+## References
+
+- [TAIP-1] Process
+- [TAIP-7] Agent Policies
+- [TAIP-8] Selective Disclosure and Authorization
+- [TAIP-12] Transaction Execution
+- [EIP-712] Typed Structured Data Hashing and Signing
+- [ERC-20] Token Standard
+- [CAIP-10] Account ID Specification
+- [ISO-4217] Currency Codes
+
+[TAIP-1]: https://tap.rsvp/TAIPs/taip-1
+[TAIP-7]: https://tap.rsvp/TAIPs/taip-7
+[TAIP-8]: https://tap.rsvp/TAIPs/taip-8
+[TAIP-12]: https://tap.rsvp/TAIPs/taip-12
+[EIP-712]: https://eips.ethereum.org/EIPS/eip-712
+[ERC-20]: https://eips.ethereum.org/EIPS/eip-20
+[CAIP-10]: https://chainagnostic.org/CAIPs/caip-10
+[ISO-4217]: https://www.iso.org/iso-4217-currency-codes.html
+
+## Copyright
+
+Copyright and related rights waived via [CC0](../LICENSE).