diff --git a/README.md b/README.md
index 824427a..390c171 100644
--- a/README.md
+++ b/README.md
@@ -4,3 +4,17 @@ 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 fake payment lifecycle for bounty payouts:
+
+- `POST /payments/send` creates a pending payment. The body accepts `recipient`,
+  `amount`, optional `currency`, optional bounty metadata, and an optional
+  `idempotency_key` for retry-safe sends.
+- `GET /payments/list` lists payments. Optional query filters: `recipient`,
+  `repository`, and `status`.
+- `GET /payments/get?payment_id=pay_1` returns one payment.
+- `POST /payments/complete` marks a pending payment as completed.
+- `POST /payments/cancel` marks a pending payment as canceled.
+- `POST /payments/fail` marks a pending payment as failed.
diff --git a/lib/db/db-client.ts b/lib/db/db-client.ts
index e525e65..4d9fd94 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 { hoist } from "zustand-hoist"
+import { 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 +15,7 @@ export const createDatabase = () => {
 
 export type DbClient = ReturnType<typeof createDatabase>
 
-const initializer = combine(databaseSchema.parse({}), (set) => ({
+const initializer = combine(databaseSchema.parse({}), (set, get) => ({
   addThing: (thing: Omit<Thing, "thing_id">) => {
     set((state) => ({
       things: [
@@ -21,4 +25,62 @@ const initializer = combine(databaseSchema.parse({}), (set) => ({
       idCounter: state.idCounter + 1,
     }))
   },
+  sendPayment: (
+    payment: Omit<
+      Payment,
+      "payment_id" | "status" | "created_at" | "updated_at"
+    >,
+  ) => {
+    const now = new Date().toISOString()
+    const existingPayment = payment.idempotency_key
+      ? get().payments.find(
+          (existing) => existing.idempotency_key === payment.idempotency_key,
+        )
+      : undefined
+
+    if (existingPayment) {
+      return existingPayment
+    }
+
+    let createdPayment: Payment | undefined
+    set((state) => {
+      createdPayment = {
+        ...payment,
+        payment_id: `pay_${state.idCounter}`,
+        status: "pending",
+        created_at: now,
+        updated_at: now,
+      }
+
+      return {
+        payments: [...state.payments, createdPayment],
+        idCounter: state.idCounter + 1,
+      }
+    })
+
+    return createdPayment!
+  },
+  updatePaymentStatus: (paymentId: string, status: PaymentStatus) => {
+    const payment = get().payments.find(
+      (existing) => existing.payment_id === paymentId,
+    )
+
+    if (!payment) {
+      return undefined
+    }
+
+    const updatedPayment = {
+      ...payment,
+      status,
+      updated_at: new Date().toISOString(),
+    }
+
+    set((state) => ({
+      payments: state.payments.map((existing) =>
+        existing.payment_id === paymentId ? updatedPayment : existing,
+      ),
+    }))
+
+    return updatedPayment
+  },
 }))
diff --git a/lib/db/schema.ts b/lib/db/schema.ts
index 8377516..c415708 100644
--- a/lib/db/schema.ts
+++ b/lib/db/schema.ts
@@ -9,8 +9,32 @@ 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(),
+  created_at: z.string(),
+  updated_at: z.string(),
+})
+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..a0622e8
--- /dev/null
+++ b/routes/payments/cancel.ts
@@ -0,0 +1,32 @@
+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().min(1),
+  }),
+  jsonResponse: z.object({
+    ok: z.boolean(),
+    error: z.string().optional(),
+    payment: paymentSchema.optional(),
+  }),
+})(async (req, ctx) => {
+  const { payment_id } = await req.json()
+  const payment = ctx.db.payments.find(
+    (existing) => existing.payment_id === payment_id,
+  )
+
+  if (!payment) {
+    return ctx.json({ ok: false, error: "Payment not found" })
+  }
+
+  if (payment.status !== "pending") {
+    return ctx.json({ ok: false, error: "Only pending payments can cancel" })
+  }
+
+  const updatedPayment = ctx.db.updatePaymentStatus(payment_id, "canceled")
+
+  return ctx.json({ ok: true, payment: updatedPayment })
+})
diff --git a/routes/payments/complete.ts b/routes/payments/complete.ts
new file mode 100644
index 0000000..ebe8954
--- /dev/null
+++ b/routes/payments/complete.ts
@@ -0,0 +1,32 @@
+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().min(1),
+  }),
+  jsonResponse: z.object({
+    ok: z.boolean(),
+    error: z.string().optional(),
+    payment: paymentSchema.optional(),
+  }),
+})(async (req, ctx) => {
+  const { payment_id } = await req.json()
+  const payment = ctx.db.payments.find(
+    (existing) => existing.payment_id === payment_id,
+  )
+
+  if (!payment) {
+    return ctx.json({ ok: false, error: "Payment not found" })
+  }
+
+  if (payment.status !== "pending") {
+    return ctx.json({ ok: false, error: "Only pending payments can complete" })
+  }
+
+  const updatedPayment = ctx.db.updatePaymentStatus(payment_id, "completed")
+
+  return ctx.json({ ok: true, payment: updatedPayment })
+})
diff --git a/routes/payments/fail.ts b/routes/payments/fail.ts
new file mode 100644
index 0000000..cd9179d
--- /dev/null
+++ b/routes/payments/fail.ts
@@ -0,0 +1,32 @@
+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().min(1),
+  }),
+  jsonResponse: z.object({
+    ok: z.boolean(),
+    error: z.string().optional(),
+    payment: paymentSchema.optional(),
+  }),
+})(async (req, ctx) => {
+  const { payment_id } = await req.json()
+  const payment = ctx.db.payments.find(
+    (existing) => existing.payment_id === payment_id,
+  )
+
+  if (!payment) {
+    return ctx.json({ ok: false, error: "Payment not found" })
+  }
+
+  if (payment.status !== "pending") {
+    return ctx.json({ ok: false, error: "Only pending payments can fail" })
+  }
+
+  const updatedPayment = ctx.db.updatePaymentStatus(payment_id, "failed")
+
+  return ctx.json({ ok: true, payment: updatedPayment })
+})
diff --git a/routes/payments/get.ts b/routes/payments/get.ts
new file mode 100644
index 0000000..6061a89
--- /dev/null
+++ b/routes/payments/get.ts
@@ -0,0 +1,23 @@
+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.object({
+    ok: z.boolean(),
+    error: z.string().optional(),
+    payment: paymentSchema.optional(),
+  }),
+})((req, ctx) => {
+  const paymentId = new URL(req.url).searchParams.get("payment_id")
+  const payment = ctx.db.payments.find(
+    (existing) => existing.payment_id === paymentId,
+  )
+
+  if (!payment) {
+    return ctx.json({ ok: false, error: "Payment not found" })
+  }
+
+  return ctx.json({ ok: true, payment })
+})
diff --git a/routes/payments/list.ts b/routes/payments/list.ts
new file mode 100644
index 0000000..1631225
--- /dev/null
+++ b/routes/payments/list.ts
@@ -0,0 +1,25 @@
+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 searchParams = new URL(req.url).searchParams
+  const recipient = searchParams.get("recipient")
+  const repository = searchParams.get("repository")
+  const statusResult = paymentStatusSchema.safeParse(searchParams.get("status"))
+  const status = statusResult.success ? statusResult.data : undefined
+
+  const payments = ctx.db.payments.filter((payment) => {
+    if (recipient && payment.recipient !== recipient) return false
+    if (repository && payment.repository !== repository) return false
+    if (status && payment.status !== status) return false
+    return true
+  })
+
+  return ctx.json({ payments })
+})
diff --git a/routes/payments/send.ts b/routes/payments/send.ts
new file mode 100644
index 0000000..7fb8091
--- /dev/null
+++ b/routes/payments/send.ts
@@ -0,0 +1,42 @@
+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({
+    recipient: z.string().min(1),
+    amount: z.number().positive(),
+    currency: z.string().min(1).default("USD"),
+    bounty_id: z.string().optional(),
+    issue_number: z.number().int().positive().optional(),
+    repository: z.string().optional(),
+    idempotency_key: z.string().optional(),
+  }),
+  jsonResponse: z.object({
+    ok: z.boolean(),
+    payment: paymentSchema,
+  }),
+})(async (req, ctx) => {
+  const {
+    recipient,
+    amount,
+    currency = "USD",
+    bounty_id,
+    issue_number,
+    repository,
+    idempotency_key,
+  } = await req.json()
+
+  const payment = ctx.db.sendPayment({
+    recipient,
+    amount,
+    currency,
+    bounty_id,
+    issue_number,
+    repository,
+    idempotency_key,
+  })
+
+  return ctx.json({ ok: true, payment })
+})
diff --git a/tests/routes/payments.test.ts b/tests/routes/payments.test.ts
new file mode 100644
index 0000000..de44d80
--- /dev/null
+++ b/tests/routes/payments.test.ts
@@ -0,0 +1,79 @@
+import { expect, test } from "bun:test"
+import { getTestServer } from "tests/fixtures/get-test-server"
+
+test("send, list, and complete a payment", async () => {
+  const { axios } = await getTestServer()
+
+  const { data: sendData } = await axios.post("/payments/send", {
+    recipient: "maintainer@example.com",
+    amount: 10,
+    currency: "USD",
+    bounty_id: "bounty_123",
+    issue_number: 1,
+    repository: "tscircuit/fake-algora",
+  })
+
+  expect(sendData.ok).toBe(true)
+  expect(sendData.payment.payment_id.startsWith("pay_")).toBe(true)
+  expect(sendData.payment.status).toBe("pending")
+  expect(sendData.payment.amount).toBe(10)
+
+  const { data: listData } = await axios.get(
+    "/payments/list?repository=tscircuit/fake-algora&status=pending",
+  )
+
+  expect(listData.payments).toHaveLength(1)
+  expect(listData.payments[0].payment_id).toBe(sendData.payment.payment_id)
+
+  const { data: completeData } = await axios.post("/payments/complete", {
+    payment_id: sendData.payment.payment_id,
+  })
+
+  expect(completeData.ok).toBe(true)
+  expect(completeData.payment.status).toBe("completed")
+})
+
+test("send payment is idempotent when an idempotency key is supplied", async () => {
+  const { axios } = await getTestServer()
+  const paymentRequest = {
+    recipient: "contributor@example.com",
+    amount: 25,
+    idempotency_key: "retry-safe-key",
+  }
+
+  const { data: firstSendData } = await axios.post(
+    "/payments/send",
+    paymentRequest,
+  )
+  const { data: secondSendData } = await axios.post(
+    "/payments/send",
+    paymentRequest,
+  )
+  const { data: listData } = await axios.get("/payments/list")
+
+  expect(secondSendData.payment.payment_id).toBe(
+    firstSendData.payment.payment_id,
+  )
+  expect(listData.payments).toHaveLength(1)
+  expect(listData.payments[0].currency).toBe("USD")
+})
+
+test("terminal payments cannot be canceled", async () => {
+  const { axios } = await getTestServer()
+
+  const { data: sendData } = await axios.post("/payments/send", {
+    recipient: "contributor@example.com",
+    amount: 5,
+  })
+
+  await axios.post("/payments/complete", {
+    payment_id: sendData.payment.payment_id,
+  })
+
+  const { data: cancelData } = await axios.post("/payments/cancel", {
+    payment_id: sendData.payment.payment_id,
+  })
+
+  expect(cancelData.ok).toBe(false)
+  expect(cancelData.error).toBe("Only pending payments can cancel")
+})