how Localbitcoins and other bitcoin wallet able to send receive without network fee

Question

I have been exploring bitcoin API and I found there is a network fee for every transaction which is around 0.0001 but I noticed many trading and bitcoin-related agencies doesn't charge any network fee at all for transfer between a user on the same Website/App. Few of which are cryptopia, Zebpay and LocalBitcoins.

Could someone help me understand how they are able to transfer between wallets without any network fee?

Answer 1

Organizations that offer online wallets aren't obligated to handle transactions using the actual Bitcoin blockchain; they may instead choose to keep their own off-chain record of transactions between users. While faster and cheaper than on-chain transactions, this system is often less secure, especially since the transaction records are centralized.
Only when a user transfers Bitcoins between an external wallet would an organization utilize the blockchain; this is when a transfer would cost some network fee and take some time to process.