What potential issue could be causing the data transfer to fail in the PHP code provided?

The potential issue causing the data transfer to fail in the given PHP code could be the lack of error handling for the file transfer process. To solve this issue, we can add error handling to check for any errors that might occur during the transfer and handle them accordingly.

<?php
$sourceFile = 'source.txt';
$destinationFile = 'destination.txt';

if (copy($sourceFile, $destinationFile)) {
    echo "File transferred successfully.";
} else {
    echo "Error transferring file.";
}
?>