diff --git a/README.md b/README.md
index 824427a..cfa5aae 100644
--- a/README.md
+++ b/README.md
@@ -4,3 +4,16 @@ This is a template project with best-practice modules:
 - Winterspec for defining the API
 - bun testing
 - Zustand store with zod definition for database state
+
+## Payment API
+
+The fake payment lifecycle supports the core bounty-payment flow:
+
+- `POST /payments/send` creates a pending payment record. Include an optional
+  `idempotency_key` to make retries return the original payment instead of
+  creating duplicates.
+- `GET /payments/list` returns payments, with optional `recipient`, `status`,
+  and `repository` query filters.
+- `GET /payments/get?payment_id=<id>` returns a single payment.
+- `POST /payments/complete` marks a payment as completed.
+- `POST /payments/cancel` marks a payment as canceled.
diff --git a/bun.lockb b/bun.lockb
index 557d79c..0c63394 100755
Binary files a/bun.lockb and b/bun.lockb differ
diff --git a/lib/db/db-client.ts b/lib/db/db-client.ts
index e525e65..90ed9ed 100644
--- a/lib/db/db-client.ts
+++ b/lib/db/db-client.ts
@@ -1,9 +1,14 @@
-import { createStore, type StoreApi } from "zustand/vanilla"
+import { type HoistedStoreApi, hoist } from "zustand-hoist"
 import { immer } from "zustand/middleware/immer"
-import { hoist, type HoistedStoreApi } from "zustand-hoist"
+import { type StoreApi, createStore } from "zustand/vanilla"
 
-import { databaseSchema, type DatabaseSchema, type Thing } from "./schema.ts"
 import { combine } from "zustand/middleware"
+import {
+  type Payment,
+  type PaymentStatus,
+  type Thing,
+  databaseSchema,
+} from "./schema.ts"
 
 export const createDatabase = () => {
   return hoist(createStore(initializer))
@@ -11,7 +16,25 @@ export const createDatabase = () => {
 
 export type DbClient = ReturnType<typeof createDatabase>
 
-const initializer = combine(databaseSchema.parse({}), (set) => ({
+type PaymentInput = Omit<
+  Payment,
+  | "payment_id"
+  | "status"
+  | "created_at"
+  | "updated_at"
+  | "completed_at"
+  | "canceled_at"
+  | "failed_at"
+>
+
+const statusTimestampField = {
+  completed: "completed_at",
+  canceled: "canceled_at",
+  failed: "failed_at",
+  pending: undefined,
+} as const satisfies Record<PaymentStatus, keyof Payment | undefined>
+
+const initializer = combine(databaseSchema.parse({}), (set, get) => ({
   addThing: (thing: Omit<Thing, "thing_id">) => {
     set((state) => ({
       things: [
@@ -21,4 +44,77 @@ const initializer = combine(databaseSchema.parse({}), (set) => ({
       idCounter: state.idCounter + 1,
     }))
   },
+  addPayment: (payment: PaymentInput): Payment => {
+    const existingPayment = payment.idempotency_key
+      ? get().payments.find(
+          (storedPayment) =>
+            storedPayment.idempotency_key === payment.idempotency_key,
+        )
+      : undefined
+
+    if (existingPayment) {
+      return existingPayment
+    }
+
+    const now = new Date().toISOString()
+    const newPayment: Payment = {
+      ...payment,
+      payment_id: get().idCounter.toString(),
+      status: "pending",
+      created_at: now,
+      updated_at: now,
+    }
+
+    set((state) => ({
+      payments: [...state.payments, newPayment],
+      idCounter: state.idCounter + 1,
+    }))
+
+    return newPayment
+  },
+  getPayment: (payment_id: string): Payment | undefined => {
+    return get().payments.find((payment) => payment.payment_id === payment_id)
+  },
+  listPayments: (
+    filters: Partial<Pick<Payment, "recipient" | "status" | "repository">>,
+  ): Payment[] => {
+    return get().payments.filter((payment) => {
+      if (filters.recipient && payment.recipient !== filters.recipient) {
+        return false
+      }
+      if (filters.status && payment.status !== filters.status) {
+        return false
+      }
+      if (filters.repository && payment.repository !== filters.repository) {
+        return false
+      }
+      return true
+    })
+  },
+  updatePaymentStatus: (
+    payment_id: string,
+    status: Exclude<PaymentStatus, "pending">,
+  ): Payment | undefined => {
+    const now = new Date().toISOString()
+    let updatedPayment: Payment | undefined
+
+    set((state) => ({
+      payments: state.payments.map((payment) => {
+        if (payment.payment_id !== payment_id) {
+          return payment
+        }
+
+        const timestampField = statusTimestampField[status]
+        updatedPayment = {
+          ...payment,
+          status,
+          updated_at: now,
+          ...(timestampField ? { [timestampField]: now } : {}),
+        }
+        return updatedPayment
+      }),
+    }))
+
+    return updatedPayment
+  },
 }))
diff --git a/lib/db/schema.ts b/lib/db/schema.ts
index 8377516..67044b6 100644
--- a/lib/db/schema.ts
+++ b/lib/db/schema.ts
@@ -9,8 +9,35 @@ export const thingSchema = z.object({
 })
 export type Thing = z.infer<typeof thingSchema>
 
+export const paymentStatusSchema = z.enum([
+  "pending",
+  "completed",
+  "canceled",
+  "failed",
+])
+export type PaymentStatus = z.infer<typeof paymentStatusSchema>
+
+export const paymentSchema = z.object({
+  payment_id: z.string(),
+  recipient: z.string(),
+  amount: z.number().positive(),
+  currency: z.string(),
+  status: paymentStatusSchema,
+  bounty_id: z.string().optional(),
+  issue_number: z.number().int().positive().optional(),
+  repository: z.string().optional(),
+  idempotency_key: z.string().optional(),
+  created_at: z.string(),
+  updated_at: z.string(),
+  completed_at: z.string().optional(),
+  canceled_at: z.string().optional(),
+  failed_at: z.string().optional(),
+})
+export type Payment = z.infer<typeof paymentSchema>
+
 export const databaseSchema = z.object({
   idCounter: z.number().default(0),
   things: z.array(thingSchema).default([]),
+  payments: z.array(paymentSchema).default([]),
 })
 export type DatabaseSchema = z.infer<typeof databaseSchema>
diff --git a/routes/payments/cancel.ts b/routes/payments/cancel.ts
new file mode 100644
index 0000000..6e622ec
--- /dev/null
+++ b/routes/payments/cancel.ts
@@ -0,0 +1,27 @@
+import { paymentSchema } from "lib/db/schema"
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { z } from "zod"
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: z.object({
+    payment_id: z.string(),
+  }),
+  jsonResponse: z.union([
+    z.object({
+      payment: paymentSchema,
+    }),
+    z.object({
+      error: z.string(),
+    }),
+  ]),
+})(async (req, ctx) => {
+  const { payment_id } = await req.json()
+  const payment = ctx.db.updatePaymentStatus(payment_id, "canceled")
+
+  if (!payment) {
+    return ctx.json({ error: "Payment not found" }, { status: 404 })
+  }
+
+  return ctx.json({ payment })
+})
diff --git a/routes/payments/complete.ts b/routes/payments/complete.ts
new file mode 100644
index 0000000..1af6be4
--- /dev/null
+++ b/routes/payments/complete.ts
@@ -0,0 +1,27 @@
+import { paymentSchema } from "lib/db/schema"
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { z } from "zod"
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: z.object({
+    payment_id: z.string(),
+  }),
+  jsonResponse: z.union([
+    z.object({
+      payment: paymentSchema,
+    }),
+    z.object({
+      error: z.string(),
+    }),
+  ]),
+})(async (req, ctx) => {
+  const { payment_id } = await req.json()
+  const payment = ctx.db.updatePaymentStatus(payment_id, "completed")
+
+  if (!payment) {
+    return ctx.json({ error: "Payment not found" }, { status: 404 })
+  }
+
+  return ctx.json({ payment })
+})
diff --git a/routes/payments/get.ts b/routes/payments/get.ts
new file mode 100644
index 0000000..2f898b5
--- /dev/null
+++ b/routes/payments/get.ts
@@ -0,0 +1,25 @@
+import { paymentSchema } from "lib/db/schema"
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { z } from "zod"
+
+export default withRouteSpec({
+  methods: ["GET"],
+  jsonResponse: z.union([
+    z.object({
+      payment: paymentSchema,
+    }),
+    z.object({
+      error: z.string(),
+    }),
+  ]),
+})((req, ctx) => {
+  const url = new URL(req.url)
+  const paymentId = url.searchParams.get("payment_id")
+  const payment = paymentId ? ctx.db.getPayment(paymentId) : undefined
+
+  if (!payment) {
+    return ctx.json({ error: "Payment not found" }, { status: 404 })
+  }
+
+  return ctx.json({ payment })
+})
diff --git a/routes/payments/list.ts b/routes/payments/list.ts
new file mode 100644
index 0000000..28e8540
--- /dev/null
+++ b/routes/payments/list.ts
@@ -0,0 +1,24 @@
+import { paymentSchema, paymentStatusSchema } from "lib/db/schema"
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { z } from "zod"
+
+export default withRouteSpec({
+  methods: ["GET"],
+  jsonResponse: z.object({
+    payments: z.array(paymentSchema),
+  }),
+})((req, ctx) => {
+  const url = new URL(req.url)
+  const statusParam = url.searchParams.get("status")
+  const status = statusParam
+    ? paymentStatusSchema.parse(statusParam)
+    : undefined
+
+  const payments = ctx.db.listPayments({
+    recipient: url.searchParams.get("recipient") ?? undefined,
+    repository: url.searchParams.get("repository") ?? undefined,
+    status,
+  })
+
+  return ctx.json({ payments })
+})
diff --git a/routes/payments/send.ts b/routes/payments/send.ts
new file mode 100644
index 0000000..28f4bc5
--- /dev/null
+++ b/routes/payments/send.ts
@@ -0,0 +1,26 @@
+import { paymentSchema } from "lib/db/schema"
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { z } from "zod"
+
+const paymentRequestSchema = z.object({
+  recipient: z.string().min(1),
+  amount: z.number().positive(),
+  currency: z.string().min(1).default("USD"),
+  repository: z.string().optional(),
+  issue_number: z.number().int().positive().optional(),
+  bounty_id: z.string().optional(),
+  idempotency_key: z.string().optional(),
+})
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: paymentRequestSchema,
+  jsonResponse: z.object({
+    payment: paymentSchema,
+  }),
+})(async (req, ctx) => {
+  const paymentRequest = await req.json()
+  const payment = ctx.db.addPayment(paymentRequest)
+
+  return ctx.json({ payment })
+})
diff --git a/tests/routes/payments.test.ts b/tests/routes/payments.test.ts
new file mode 100644
index 0000000..08aa968
--- /dev/null
+++ b/tests/routes/payments.test.ts
@@ -0,0 +1,72 @@
+import { expect, test } from "bun:test"
+import { getTestServer } from "tests/fixtures/get-test-server"
+
+test("send payment is idempotent and queryable", async () => {
+  const { axios } = await getTestServer()
+
+  const paymentRequest = {
+    recipient: "richboyneedcash",
+    amount: 10,
+    currency: "USD",
+    repository: "tscircuit/fake-algora",
+    issue_number: 1,
+    bounty_id: "fake-algora-1",
+    idempotency_key: "issue-1-richboyneedcash",
+  }
+
+  const firstResponse = await axios.post("/payments/send", paymentRequest)
+  const replayResponse = await axios.post("/payments/send", paymentRequest)
+
+  expect(replayResponse.data.payment.payment_id).toBe(
+    firstResponse.data.payment.payment_id,
+  )
+
+  const { data: listData } = await axios.get(
+    "/payments/list?recipient=richboyneedcash&status=pending",
+  )
+  expect(listData.payments).toHaveLength(1)
+  expect(listData.payments[0]).toMatchObject({
+    recipient: "richboyneedcash",
+    amount: 10,
+    currency: "USD",
+    repository: "tscircuit/fake-algora",
+    issue_number: 1,
+    status: "pending",
+  })
+})
+
+test("payment lifecycle can be completed or canceled", async () => {
+  const { axios } = await getTestServer()
+
+  const { data: sentData } = await axios.post("/payments/send", {
+    recipient: "first-contributor",
+    amount: 15,
+    currency: "USD",
+    repository: "tscircuit/fake-algora",
+    issue_number: 1,
+  })
+
+  const paymentId = sentData.payment.payment_id
+
+  const { data: getData } = await axios.get(
+    `/payments/get?payment_id=${paymentId}`,
+  )
+  expect(getData.payment.status).toBe("pending")
+
+  const { data: completeData } = await axios.post("/payments/complete", {
+    payment_id: paymentId,
+  })
+  expect(completeData.payment.status).toBe("completed")
+  expect(completeData.payment.completed_at).toBeString()
+
+  const { data: cancelSentData } = await axios.post("/payments/send", {
+    recipient: "second-contributor",
+    amount: 20,
+    currency: "USD",
+  })
+  const { data: cancelData } = await axios.post("/payments/cancel", {
+    payment_id: cancelSentData.payment.payment_id,
+  })
+  expect(cancelData.payment.status).toBe("canceled")
+  expect(cancelData.payment.canceled_at).toBeString()
+})