diff --git a/README.md b/README.md
index 824427a..84e7638 100644
--- a/README.md
+++ b/README.md
@@ -4,3 +4,14 @@ 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 Payments API
+
+The API includes an in-memory fake payment flow for bounty payout simulations.
+
+- `POST /payments/send` creates a pending payment.
+- `GET /payments/list` lists payments, optionally filtered by `recipient`, `repository`, `bounty_issue`, or `status`.
+- `GET /payments/get?payment_id=...` returns a single payment.
+- `POST /payments/update-status` updates a payment to `pending`, `completed`, `failed`, or `canceled`.
+
+`POST /payments/send` accepts an optional `idempotency_key`. Reusing the same key returns the original payment with `idempotent_replay: true`, so callers can retry safely without creating duplicate fake transfers.
diff --git a/lib/db/db-client.ts b/lib/db/db-client.ts
index e525e65..5e6b20e 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 +15,12 @@ export const createDatabase = () => {
 
 export type DbClient = ReturnType<typeof createDatabase>
 
-const initializer = combine(databaseSchema.parse({}), (set) => ({
+type NewPayment = Omit<
+  Payment,
+  "payment_id" | "status" | "created_at" | "updated_at"
+>
+
+const initializer = combine(databaseSchema.parse({}), (set, get) => ({
   addThing: (thing: Omit<Thing, "thing_id">) => {
     set((state) => ({
       things: [
@@ -21,4 +30,45 @@ const initializer = combine(databaseSchema.parse({}), (set) => ({
       idCounter: state.idCounter + 1,
     }))
   },
+  addPayment: (paymentInput: NewPayment) => {
+    const now = new Date().toISOString()
+    const payment: Payment = {
+      ...paymentInput,
+      payment_id: `payment_${get().paymentIdCounter}`,
+      status: "pending",
+      created_at: now,
+      updated_at: now,
+    }
+
+    set((state) => ({
+      payments: [...state.payments, payment],
+      paymentIdCounter: state.paymentIdCounter + 1,
+    }))
+
+    return payment
+  },
+  updatePaymentStatus: (paymentId: string, status: PaymentStatus) => {
+    const now = new Date().toISOString()
+    const existingPayment = get().payments.find(
+      (payment) => payment.payment_id === paymentId,
+    )
+
+    if (!existingPayment) {
+      return undefined
+    }
+
+    const updatedPayment: Payment = {
+      ...existingPayment,
+      status,
+      updated_at: now,
+    }
+
+    set((state) => ({
+      payments: state.payments.map((payment) =>
+        payment.payment_id === paymentId ? updatedPayment : payment,
+      ),
+    }))
+
+    return updatedPayment
+  },
 }))
diff --git a/lib/db/schema.ts b/lib/db/schema.ts
index 8377516..48f5ece 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",
+  "failed",
+  "canceled",
+])
+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(),
+  repository: z.string().optional(),
+  bounty_issue: z.string().optional(),
+  idempotency_key: z.string().optional(),
+  status: paymentStatusSchema,
+  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),
+  paymentIdCounter: 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/get.ts b/routes/payments/get.ts
new file mode 100644
index 0000000..542136c
--- /dev/null
+++ b/routes/payments/get.ts
@@ -0,0 +1,26 @@
+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({
+    payment: paymentSchema,
+  }),
+})((req, ctx) => {
+  const paymentId = new URL(req.url).searchParams.get("payment_id")
+  const payment = ctx.db.payments.find(
+    (payment) => payment.payment_id === paymentId,
+  )
+
+  if (!payment) {
+    return new Response(JSON.stringify({ error: "Payment not found" }), {
+      status: 404,
+      headers: {
+        "content-type": "application/json",
+      },
+    })
+  }
+
+  return ctx.json({ payment })
+})
diff --git a/routes/payments/list.ts b/routes/payments/list.ts
new file mode 100644
index 0000000..f2ff67c
--- /dev/null
+++ b/routes/payments/list.ts
@@ -0,0 +1,30 @@
+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 bountyIssue = searchParams.get("bounty_issue")
+  const status = paymentStatusSchema
+    .optional()
+    .safeParse(searchParams.get("status"))
+
+  const payments = ctx.db.payments.filter((payment) => {
+    if (recipient && payment.recipient !== recipient) return false
+    if (repository && payment.repository !== repository) return false
+    if (bountyIssue && payment.bounty_issue !== bountyIssue) return false
+    if (status.success && status.data && payment.status !== status.data) {
+      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..5efe0be
--- /dev/null
+++ b/routes/payments/send.ts
@@ -0,0 +1,43 @@
+import { paymentSchema } from "lib/db/schema"
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { z } from "zod"
+
+const sendPaymentBodySchema = z.object({
+  recipient: z.string().min(1),
+  amount: z.number().positive(),
+  currency: z.string().min(3).default("USD"),
+  repository: z.string().optional(),
+  bounty_issue: z.string().optional(),
+  idempotency_key: z.string().optional(),
+})
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: sendPaymentBodySchema,
+  jsonResponse: z.object({
+    idempotent_replay: z.boolean(),
+    payment: paymentSchema,
+  }),
+})(async (req, ctx) => {
+  const body = sendPaymentBodySchema.parse(await req.json())
+
+  if (body.idempotency_key) {
+    const existingPayment = ctx.db.payments.find(
+      (payment) => payment.idempotency_key === body.idempotency_key,
+    )
+
+    if (existingPayment) {
+      return ctx.json({
+        idempotent_replay: true,
+        payment: existingPayment,
+      })
+    }
+  }
+
+  const payment = ctx.db.addPayment(body)
+
+  return ctx.json({
+    idempotent_replay: false,
+    payment,
+  })
+})
diff --git a/routes/payments/update-status.ts b/routes/payments/update-status.ts
new file mode 100644
index 0000000..e5d1d10
--- /dev/null
+++ b/routes/payments/update-status.ts
@@ -0,0 +1,32 @@
+import { paymentSchema, paymentStatusSchema } from "lib/db/schema"
+import { withRouteSpec } from "lib/middleware/with-winter-spec"
+import { z } from "zod"
+
+const updatePaymentStatusBodySchema = z.object({
+  payment_id: z.string(),
+  status: paymentStatusSchema,
+})
+
+export default withRouteSpec({
+  methods: ["POST"],
+  jsonBody: updatePaymentStatusBodySchema,
+  jsonResponse: z.object({
+    payment: paymentSchema,
+  }),
+})(async (req, ctx) => {
+  const { payment_id, status } = updatePaymentStatusBodySchema.parse(
+    await req.json(),
+  )
+  const payment = ctx.db.updatePaymentStatus(payment_id, status)
+
+  if (!payment) {
+    return new Response(JSON.stringify({ error: "Payment not found" }), {
+      status: 404,
+      headers: {
+        "content-type": "application/json",
+      },
+    })
+  }
+
+  return ctx.json({ payment })
+})
diff --git a/tests/routes/payments.test.ts b/tests/routes/payments.test.ts
new file mode 100644
index 0000000..3e4051b
--- /dev/null
+++ b/tests/routes/payments.test.ts
@@ -0,0 +1,83 @@
+import { expect, it } from "bun:test"
+import { getTestServer } from "tests/fixtures/get-test-server"
+
+it("sends and replays fake payments with an idempotency key", async () => {
+  const { axios } = await getTestServer()
+
+  const payload = {
+    recipient: "maintainer@example.com",
+    amount: 1250,
+    currency: "USD",
+    repository: "tscircuit/fake-algora",
+    bounty_issue: "https://github.com/tscircuit/fake-algora/issues/1",
+    idempotency_key: "retry-safe-payment-1",
+  }
+
+  const firstSend = await axios.post("/payments/send", payload)
+
+  expect(firstSend.status).toBe(200)
+  expect(firstSend.data.idempotent_replay).toBe(false)
+  expect(firstSend.data.payment).toMatchObject({
+    payment_id: "payment_0",
+    recipient: payload.recipient,
+    amount: payload.amount,
+    currency: payload.currency,
+    repository: payload.repository,
+    bounty_issue: payload.bounty_issue,
+    status: "pending",
+  })
+  expect(firstSend.data.payment.created_at).toBeString()
+  expect(firstSend.data.payment.updated_at).toBeString()
+
+  const replay = await axios.post("/payments/send", payload)
+
+  expect(replay.status).toBe(200)
+  expect(replay.data.idempotent_replay).toBe(true)
+  expect(replay.data.payment.payment_id).toBe("payment_0")
+
+  const lookup = await axios.get("/payments/get?payment_id=payment_0")
+
+  expect(lookup.status).toBe(200)
+  expect(lookup.data.payment).toMatchObject({
+    payment_id: "payment_0",
+    recipient: payload.recipient,
+    amount: payload.amount,
+    status: "pending",
+  })
+
+  const list = await axios.get(
+    "/payments/list?recipient=maintainer@example.com&status=pending",
+  )
+
+  expect(list.status).toBe(200)
+  expect(list.data.payments).toHaveLength(1)
+  expect(list.data.payments[0].payment_id).toBe("payment_0")
+})
+
+it("updates fake payment status once it is sent", async () => {
+  const { axios } = await getTestServer()
+
+  const send = await axios.post("/payments/send", {
+    recipient: "contributor@example.com",
+    amount: 500,
+    currency: "USD",
+    repository: "tscircuit/fake-algora",
+  })
+
+  const update = await axios.post("/payments/update-status", {
+    payment_id: send.data.payment.payment_id,
+    status: "completed",
+  })
+
+  expect(update.status).toBe(200)
+  expect(update.data.payment).toMatchObject({
+    payment_id: send.data.payment.payment_id,
+    status: "completed",
+  })
+
+  const list = await axios.get("/payments/list?status=completed")
+
+  expect(list.status).toBe(200)
+  expect(list.data.payments).toHaveLength(1)
+  expect(list.data.payments[0].status).toBe("completed")
+})