diff --git a/README.md b/README.md
index 824427a..45fde0a 100644
--- a/README.md
+++ b/README.md
@@ -4,3 +4,43 @@ This is a template project with best-practice modules:
 - Winterspec for defining the API
 - bun testing
 - Zustand store with zod definition for database state
+
+## Fake payment API
+
+The payment routes provide a small in-memory API for simulating bounty payouts.
+
+### Send a payment
+
+`POST /payments/send`
+
+```json
+{
+  "recipient": "octocat",
+  "amount": 10,
+  "currency": "USD",
+  "bounty_id": "fake-algora-1",
+  "issue_number": 1,
+  "repository": "tscircuit/fake-algora",
+  "idempotency_key": "optional-retry-key"
+}
+```
+
+### Read payments
+
+- `GET /payments/list`
+- `GET /payments/list?recipient=octocat&status=pending`
+- `GET /payments/get?payment_id=0`
+
+### Transition payments
+
+- `POST /payments/complete`
+- `POST /payments/cancel`
+- `POST /payments/fail`
+
+Each transition accepts:
+
+```json
+{
+  "payment_id": "0"
+}
+```
diff --git a/lib/db/db-client.ts b/lib/db/db-client.ts
index e525e65..b54093b 100644
--- a/lib/db/db-client.ts
+++ b/lib/db/db-client.ts
@@ -1,9 +1,13 @@
-import { createStore, type StoreApi } from "zustand/vanilla"
-import { immer } from "zustand/middleware/immer"
-import { hoist, type HoistedStoreApi } from "zustand-hoist"
-
-import { databaseSchema, type DatabaseSchema, type Thing } from "./schema.ts"
+import { hoist } from "zustand-hoist"
 import { combine } from "zustand/middleware"
+import { createStore } from "zustand/vanilla"
+
+import {
+  type Payment,
+  type PaymentStatus,
+  type Thing,
+  databaseSchema,
+} from "./schema.ts"
 
 export const createDatabase = () => {
   return hoist(createStore(initializer))
@@ -11,7 +15,18 @@ export const createDatabase = () => {
 
 export type DbClient = ReturnType<typeof createDatabase>
 
-const initializer = combine(databaseSchema.parse({}), (set) => ({
+export interface CreatePaymentInput {
+  recipient: string
+  amount: number
+  currency?: string
+  bounty_id?: string
+  issue_number?: number
+  repository?: string
+  idempotency_key?: string
+  note?: string
+}
+
+const initializer = combine(databaseSchema.parse({}), (set, get) => ({
   addThing: (thing: Omit<Thing, "thing_id">) => {
     set((state) => ({
       things: [
@@ -21,4 +36,107 @@ const initializer = combine(databaseSchema.parse({}), (set) => ({
       idCounter: state.idCounter + 1,
     }))
   },
+  createPayment: (input: CreatePaymentInput) => {
+    let result: { payment: Payment; idempotent_replay: boolean } | undefined
+
+    set((state) => {
+      const existingPayment = input.idempotency_key
+        ? state.payments.find(
+            (payment) => payment.idempotency_key === input.idempotency_key,
+          )
+        : undefined
+
+      if (existingPayment) {
+        result = {
+          payment: existingPayment,
+          idempotent_replay: true,
+        }
+        return {}
+      }
+
+      const now = new Date().toISOString()
+      const payment: Payment = {
+        payment_id: state.paymentIdCounter.toString(),
+        recipient: input.recipient,
+        amount: input.amount,
+        currency: input.currency ?? "USD",
+        status: "pending",
+        bounty_id: input.bounty_id,
+        issue_number: input.issue_number,
+        repository: input.repository,
+        idempotency_key: input.idempotency_key,
+        note: input.note,
+        created_at: now,
+        updated_at: now,
+      }
+
+      result = {
+        payment,
+        idempotent_replay: false,
+      }
+
+      return {
+        payments: [...state.payments, payment],
+        paymentIdCounter: state.paymentIdCounter + 1,
+      }
+    })
+
+    if (!result) {
+      throw new Error("Payment was not created")
+    }
+
+    return result
+  },
+  listPayments: (filters: {
+    recipient?: string
+    status?: PaymentStatus
+    repository?: string
+  }) => {
+    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
+    })
+  },
+  getPayment: (payment_id: string) => {
+    return get().payments.find((payment) => payment.payment_id === payment_id)
+  },
+  updatePaymentStatus: (payment_id: string, status: PaymentStatus) => {
+    let updatedPayment: Payment | undefined
+
+    set((state) => {
+      const now = new Date().toISOString()
+      const payments = state.payments.map((payment) => {
+        if (payment.payment_id !== payment_id) {
+          return payment
+        }
+
+        updatedPayment = {
+          ...payment,
+          status,
+          updated_at: now,
+          completed_at:
+            status === "completed" ? payment.completed_at ?? now : undefined,
+          canceled_at:
+            status === "canceled" ? payment.canceled_at ?? now : undefined,
+          failed_at: status === "failed" ? payment.failed_at ?? now : undefined,
+        }
+
+        return updatedPayment
+      })
+
+      return {
+        payments,
+      }
+    })
+
+    return updatedPayment
+  },
 }))
diff --git a/lib/db/schema.ts b/lib/db/schema.ts
index 8377516..e789571 100644
--- a/lib/db/schema.ts
+++ b/lib/db/schema.ts
@@ -9,8 +9,37 @@ 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(),
+  currency: z.string(),
+  status: paymentStatusSchema,
+  bounty_id: z.string().optional(),
+  issue_number: z.number().optional(),
+  repository: z.string().optional(),
+  idempotency_key: z.string().optional(),
+  note: 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([]),
+  paymentIdCounter: z.number().default(0),
+  payments: z.array(paymentSchema).default([]),
 })
 export type DatabaseSchema = z.infer<typeof databaseSchema>
diff --git a/lib/payments/schemas.ts b/lib/payments/schemas.ts
new file mode 100644
index 0000000..8d94e46
--- /dev/null
+++ b/lib/payments/schemas.ts
@@ -0,0 +1,33 @@
+import { paymentSchema } from "lib/db/schema"
+import { z } from "zod"
+
+export const sendPaymentBodySchema = z.object({
+  recipient: z.string().min(1),
+  amount: z.number().positive(),
+  currency: z.string().min(1).default("USD"),
+  bounty_id: z.string().min(1).optional(),
+  issue_number: z.number().int().positive().optional(),
+  repository: z.string().min(1).optional(),
+  idempotency_key: z.string().min(1).optional(),
+  note: z.string().optional(),
+})
+
+export const paymentResponseSchema = z.object({
+  payment: paymentSchema,
+})
+
+export const sendPaymentResponseSchema = paymentResponseSchema.extend({
+  idempotent_replay: z.boolean(),
+})
+
+export const nullablePaymentResponseSchema = z.object({
+  payment: paymentSchema.nullable(),
+})
+
+export const listPaymentsResponseSchema = z.object({
+  payments: z.array(paymentSchema),
+})
+
+export const transitionPaymentBodySchema = z.object({
+  payment_id: z.string().min(1),
+})
diff --git a/routes/payments/cancel.ts b/routes/payments/cancel.ts
new file mode 100644
index 0000000..88d9003
--- /dev/null
+++ b/routes/payments/cancel.ts
@@ -0,0 +1,16 @@
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import {
+  nullablePaymentResponseSchema,
+  transitionPaymentBodySchema,
+} from "lib/payments/schemas"
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: transitionPaymentBodySchema,
+  jsonResponse: nullablePaymentResponseSchema,
+})(async (req, ctx) => {
+  const { payment_id } = transitionPaymentBodySchema.parse(await req.json())
+  const payment = ctx.db.updatePaymentStatus(payment_id, "canceled")
+
+  return ctx.json({ payment: payment ?? null })
+})
diff --git a/routes/payments/complete.ts b/routes/payments/complete.ts
new file mode 100644
index 0000000..5e06c12
--- /dev/null
+++ b/routes/payments/complete.ts
@@ -0,0 +1,16 @@
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import {
+  nullablePaymentResponseSchema,
+  transitionPaymentBodySchema,
+} from "lib/payments/schemas"
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: transitionPaymentBodySchema,
+  jsonResponse: nullablePaymentResponseSchema,
+})(async (req, ctx) => {
+  const { payment_id } = transitionPaymentBodySchema.parse(await req.json())
+  const payment = ctx.db.updatePaymentStatus(payment_id, "completed")
+
+  return ctx.json({ payment: payment ?? null })
+})
diff --git a/routes/payments/fail.ts b/routes/payments/fail.ts
new file mode 100644
index 0000000..2e65f48
--- /dev/null
+++ b/routes/payments/fail.ts
@@ -0,0 +1,16 @@
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import {
+  nullablePaymentResponseSchema,
+  transitionPaymentBodySchema,
+} from "lib/payments/schemas"
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: transitionPaymentBodySchema,
+  jsonResponse: nullablePaymentResponseSchema,
+})(async (req, ctx) => {
+  const { payment_id } = transitionPaymentBodySchema.parse(await req.json())
+  const payment = ctx.db.updatePaymentStatus(payment_id, "failed")
+
+  return ctx.json({ payment: payment ?? null })
+})
diff --git a/routes/payments/get.ts b/routes/payments/get.ts
new file mode 100644
index 0000000..8a6ca2d
--- /dev/null
+++ b/routes/payments/get.ts
@@ -0,0 +1,12 @@
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { nullablePaymentResponseSchema } from "lib/payments/schemas"
+
+export default withRouteSpec({
+  methods: ["GET"],
+  jsonResponse: nullablePaymentResponseSchema,
+})((req, ctx) => {
+  const paymentId = new URL(req.url).searchParams.get("payment_id")
+  const payment = paymentId ? ctx.db.getPayment(paymentId) : undefined
+
+  return ctx.json({ payment: payment ?? null })
+})
diff --git a/routes/payments/list.ts b/routes/payments/list.ts
new file mode 100644
index 0000000..cae8ea4
--- /dev/null
+++ b/routes/payments/list.ts
@@ -0,0 +1,19 @@
+import { paymentStatusSchema } from "lib/db/schema"
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { listPaymentsResponseSchema } from "lib/payments/schemas"
+
+export default withRouteSpec({
+  methods: ["GET"],
+  jsonResponse: listPaymentsResponseSchema,
+})((req, ctx) => {
+  const searchParams = new URL(req.url).searchParams
+  const status = paymentStatusSchema.safeParse(searchParams.get("status"))
+
+  const payments = ctx.db.listPayments({
+    recipient: searchParams.get("recipient") ?? undefined,
+    repository: searchParams.get("repository") ?? undefined,
+    status: status.success ? status.data : undefined,
+  })
+
+  return ctx.json({ payments })
+})
diff --git a/routes/payments/send.ts b/routes/payments/send.ts
new file mode 100644
index 0000000..9ca4fe2
--- /dev/null
+++ b/routes/payments/send.ts
@@ -0,0 +1,16 @@
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import {
+  sendPaymentBodySchema,
+  sendPaymentResponseSchema,
+} from "lib/payments/schemas"
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: sendPaymentBodySchema,
+  jsonResponse: sendPaymentResponseSchema,
+})(async (req, ctx) => {
+  const body = sendPaymentBodySchema.parse(await req.json())
+  const result = ctx.db.createPayment(body)
+
+  return ctx.json(result)
+})
diff --git a/tests/routes/payments.test.ts b/tests/routes/payments.test.ts
new file mode 100644
index 0000000..6a03e22
--- /dev/null
+++ b/tests/routes/payments.test.ts
@@ -0,0 +1,76 @@
+import { expect, test } from "bun:test"
+import { getTestServer } from "tests/fixtures/get-test-server"
+
+test("sends and lists fake payments", async () => {
+  const { axios } = await getTestServer()
+
+  const { data: sent } = await axios.post("/payments/send", {
+    recipient: "octocat",
+    amount: 10,
+    currency: "USD",
+    bounty_id: "fake-algora-1",
+    issue_number: 1,
+    repository: "tscircuit/fake-algora",
+    note: "Bounty payout",
+  })
+
+  expect(sent.idempotent_replay).toBe(false)
+  expect(sent.payment).toMatchObject({
+    payment_id: "0",
+    recipient: "octocat",
+    amount: 10,
+    currency: "USD",
+    status: "pending",
+    bounty_id: "fake-algora-1",
+    issue_number: 1,
+    repository: "tscircuit/fake-algora",
+  })
+
+  const { data: listed } = await axios.get(
+    "/payments/list?recipient=octocat&status=pending",
+  )
+
+  expect(listed.payments).toHaveLength(1)
+  expect(listed.payments[0].payment_id).toBe("0")
+})
+
+test("reuses payment for matching idempotency key", async () => {
+  const { axios } = await getTestServer()
+
+  const requestBody = {
+    recipient: "retry-safe-user",
+    amount: 5,
+    idempotency_key: "retry-key-1",
+  }
+
+  const { data: first } = await axios.post("/payments/send", requestBody)
+  const { data: second } = await axios.post("/payments/send", requestBody)
+  const { data: listed } = await axios.get("/payments/list")
+
+  expect(first.idempotent_replay).toBe(false)
+  expect(second.idempotent_replay).toBe(true)
+  expect(second.payment.payment_id).toBe(first.payment.payment_id)
+  expect(listed.payments).toHaveLength(1)
+})
+
+test("gets and transitions payment status", async () => {
+  const { axios } = await getTestServer()
+
+  const { data: sent } = await axios.post("/payments/send", {
+    recipient: "maintainer",
+    amount: 12,
+  })
+
+  const { data: fetched } = await axios.get(
+    `/payments/get?payment_id=${sent.payment.payment_id}`,
+  )
+
+  expect(fetched.payment.status).toBe("pending")
+
+  const { data: completed } = await axios.post("/payments/complete", {
+    payment_id: sent.payment.payment_id,
+  })
+
+  expect(completed.payment.status).toBe("completed")
+  expect(typeof completed.payment.completed_at).toBe("string")
+})