diff --git a/cmd/serve.go b/cmd/serve.go
index 8a4f110a..c529d6c0 100644
--- a/cmd/serve.go
+++ b/cmd/serve.go
@@ -26,7 +26,7 @@ import (
 	"time"
 
 	"github.com/cerc-io/ipld-eth-server/v5/pkg/log"
-	"github.com/cerc-io/ipld-eth-server/v5/pkg/nitro"
+	"github.com/cerc-io/ipld-eth-server/v5/pkg/payments"
 	"github.com/ethereum/go-ethereum/rpc"
 	"github.com/mailgun/groupcache/v2"
 	"github.com/spf13/cobra"
@@ -98,11 +98,8 @@ func serve() {
 
 	// TODO: Create required config for Nitro node
 
-	// TODO: Create a new Nitro node using the config
-	nitro, _ := nitro.NewNitroNode()
-
-	// TODO: Start the Nitro node, pass wg
-	nitro.Start(wg)
+	paymentsManager, _ := payments.NewPaymentsManager(true)
+	paymentsManager.Start(wg)
 
 	shutdown := make(chan os.Signal, 1)
 	signal.Notify(shutdown, os.Interrupt)
@@ -111,9 +108,7 @@ func serve() {
 		graphQL.Stop()
 	}
 	server.Stop()
-
-	// TODO: Stop nitro node
-	nitro.Stop()
+	paymentsManager.Stop()
 
 	wg.Wait()
 }
diff --git a/go.mod b/go.mod
index 277dcaa1..84bda243 100644
--- a/go.mod
+++ b/go.mod
@@ -8,7 +8,7 @@ require (
 	github.com/cerc-io/ipfs-ethdb/v5 v5.0.0-alpha
 	github.com/cerc-io/ipld-eth-statedb v0.0.5-alpha
 	github.com/cerc-io/plugeth-statediff v0.1.1
-	github.com/ethereum/go-ethereum v1.12.0  // TODO: Investigate
+	github.com/ethereum/go-ethereum v1.12.0 // TODO: Investigate
 	github.com/google/uuid v1.3.0
 	github.com/graph-gophers/graphql-go v1.3.0
 	github.com/ipfs/go-cid v0.4.1
@@ -299,4 +299,4 @@ replace (
 	github.com/cerc-io/ipfs-ethdb/v5 => /home/prathamesh/deepstack/ipfs-ethdb
 )
 
-replace github.com/statechannels/go-nitro v0.1.1 => github.com/cerc-io/go-nitro v0.1.1-ts-port-0.1.5
+replace github.com/statechannels/go-nitro v0.1.1 => github.com/cerc-io/go-nitro v0.1.1-ts-port-0.1.6
diff --git a/go.sum b/go.sum
index 120b3bf2..cef443e7 100644
--- a/go.sum
+++ b/go.sum
@@ -112,8 +112,8 @@ github.com/cenkalti/backoff/v4 v4.2.1/go.mod h1:Y3VNntkOUPxTVeUxJ/G5vcM//AlwfmyY
 github.com/census-instrumentation/opencensus-proto v0.2.1/go.mod h1:f6KPmirojxKA12rnyqOA5BBL4O983OfeGPqjHWSTneU=
 github.com/ceramicnetwork/go-dag-jose v0.1.0 h1:yJ/HVlfKpnD3LdYP03AHyTvbm3BpPiz2oZiOeReJRdU=
 github.com/ceramicnetwork/go-dag-jose v0.1.0/go.mod h1:qYA1nYt0X8u4XoMAVoOV3upUVKtrxy/I670Dg5F0wjI=
-github.com/cerc-io/go-nitro v0.1.1-ts-port-0.1.5 h1:Htdvri3Mc407d0dGBwQKQjwIc1o45rVOC1XLHL7wLFM=
-github.com/cerc-io/go-nitro v0.1.1-ts-port-0.1.5/go.mod h1:Cc6AgGm/Ou9P6vdssCPRDfrpb9iKIhY2hiPcWX4aOrw=
+github.com/cerc-io/go-nitro v0.1.1-ts-port-0.1.6 h1:rtOsOFPnz1bX6Z/Ejxv19PuDEMFxXElvGpTx5pbBkXU=
+github.com/cerc-io/go-nitro v0.1.1-ts-port-0.1.6/go.mod h1:Cc6AgGm/Ou9P6vdssCPRDfrpb9iKIhY2hiPcWX4aOrw=
 github.com/cespare/cp v0.1.0 h1:SE+dxFebS7Iik5LK0tsi1k9ZCxEaFX4AjQmoyA+1dJk=
 github.com/cespare/cp v0.1.0/go.mod h1:SOGHArjBr4JWaSDEVpWpo/hNg6RoKrls6Oh40hiwW+s=
 github.com/cespare/xxhash v1.1.0 h1:a6HrQnmkObjyL+Gs60czilIUGqrzKutQD6XZog3p+ko=
diff --git a/pkg/nitro/node.go b/pkg/nitro/node.go
deleted file mode 100644
index 8ca98430..00000000
--- a/pkg/nitro/node.go
+++ /dev/null
@@ -1,48 +0,0 @@
-// VulcanizeDB
-// Copyright © 2023 Vulcanize
-
-// This program is free software: you can redistribute it and/or modify
-// it under the terms of the GNU Affero General Public License as published by
-// the Free Software Foundation, either version 3 of the License, or
-// (at your option) any later version.
-
-// This program is distributed in the hope that it will be useful,
-// but WITHOUT ANY WARRANTY; without even the implied warranty of
-// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
-// GNU Affero General Public License for more details.
-
-// You should have received a copy of the GNU Affero General Public License
-// along with this program.  If not, see <http://www.gnu.org/licenses/>.
-
-package nitro
-
-import (
-	"sync"
-)
-
-// TODO: Implement
-// Struct representing the in-process Nitro node
-type NitroNode struct {
-	// Used to signal shutdown of the node
-	QuitChan chan bool
-}
-
-func NewNitroNode() (NitroNode, error) {
-	// TODO: Implement
-	return NitroNode{}, nil
-}
-
-func (n *NitroNode) Start(wg *sync.WaitGroup) {
-	// TODO: Implement
-	go func() {
-		wg.Add(1)
-		defer wg.Done()
-		<-n.QuitChan
-	}()
-}
-
-func (n *NitroNode) Stop() error {
-	// TODO: Implement
-	close(n.QuitChan)
-	return nil
-}
diff --git a/pkg/payments/payments_manager.go b/pkg/payments/payments_manager.go
new file mode 100644
index 00000000..1b6f3697
--- /dev/null
+++ b/pkg/payments/payments_manager.go
@@ -0,0 +1,153 @@
+// VulcanizeDB
+// Copyright © 2023 Vulcanize
+
+// This program is free software: you can redistribute it and/or modify
+// it under the terms of the GNU Affero General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+
+// This program is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU Affero General Public License for more details.
+
+// You should have received a copy of the GNU Affero General Public License
+// along with this program.  If not, see <http://www.gnu.org/licenses/>.
+
+package payments
+
+import (
+	"sync"
+
+	"github.com/cerc-io/ipld-eth-server/v5/pkg/log"
+	"github.com/ethereum/go-ethereum/common"
+	"github.com/statechannels/go-nitro/node/engine"
+	"github.com/statechannels/go-nitro/node/engine/chainservice"
+	"github.com/statechannels/go-nitro/node/engine/store"
+
+	nitroNode "github.com/statechannels/go-nitro/node"
+	p2pms "github.com/statechannels/go-nitro/node/engine/messageservice/p2p-message-service"
+)
+
+// TODO: Implement
+// Struct representing payments manager
+// Maintains either an in-process or communication with an out-of-process Nitro node
+type PaymentsManager struct {
+	// Whether to run an in-process Nitro node
+	runInProcessNitroNode bool
+
+	// In-process Nitro node; nil when runInProcessNitroNode is false
+	nitroNode *nitroNode.Node
+
+	// Used to signal shutdown of the service
+	quitChan chan bool
+}
+
+func NewPaymentsManager(runInProcessNitroNode bool) (PaymentsManager, error) {
+	// TODO: Implement
+	var err error
+
+	pm := PaymentsManager{runInProcessNitroNode: runInProcessNitroNode}
+
+	if runInProcessNitroNode {
+		pm.nitroNode, err = initializeNitroNode()
+		if err != nil {
+			return PaymentsManager{}, err
+		}
+	}
+
+	return pm, nil
+}
+
+func (pm *PaymentsManager) Start(wg *sync.WaitGroup) {
+	// TODO: Implement
+	go func() {
+		wg.Add(1)
+		defer wg.Done()
+		<-pm.quitChan
+	}()
+}
+
+func (pm *PaymentsManager) Stop() error {
+	// TODO: Implement
+	close(pm.quitChan)
+	return nil
+}
+
+func initializeNitroNode() (*nitroNode.Node, error) {
+	// TODO: Configure
+	pkString := ""
+	useDurableStore := true
+	durableStoreFolder := "./data/nitro-store"
+	msgPort := 3005
+	wsMsgPort := 5005
+	chainUrl := "ws://127.0.0.1:8546"
+	chainStartBlock := uint64(0)
+	chainPk := ""
+	naAddress := ""
+	vpaAddress := ""
+	caAddress := ""
+
+	chainAuthToken := ""
+	publicIp := "0.0.0.0"
+
+	chainOpts := chainservice.ChainOpts{
+		ChainUrl:        chainUrl,
+		ChainStartBlock: chainStartBlock,
+		ChainAuthToken:  chainAuthToken,
+		ChainPk:         chainPk,
+		NaAddress:       common.HexToAddress(naAddress),
+		VpaAddress:      common.HexToAddress(vpaAddress),
+		CaAddress:       common.HexToAddress(caAddress),
+	}
+
+	storeOpts := store.StoreOpts{
+		PkBytes:            common.Hex2Bytes(pkString),
+		UseDurableStore:    useDurableStore,
+		DurableStoreFolder: durableStoreFolder,
+	}
+
+	peerSlice := []string{}
+
+	messageOpts := p2pms.MessageOpts{
+		PkBytes:   common.Hex2Bytes(pkString),
+		TcpPort:   msgPort,
+		WsMsgPort: wsMsgPort,
+		BootPeers: peerSlice,
+		PublicIp:  publicIp,
+	}
+
+	ourStore, err := store.NewStore(storeOpts)
+	if err != nil {
+		return nil, err
+	}
+
+	log.Info("Initializing message service", "tcp port", messageOpts.TcpPort, "web socket port", messageOpts.WsMsgPort)
+	messageOpts.SCAddr = *ourStore.GetAddress()
+	messageService := p2pms.NewMessageService(messageOpts)
+
+	// Compare chainOpts.ChainStartBlock to lastBlockNum seen in store. The larger of the two
+	// gets passed as an argument when creating NewEthChainService
+	storeBlockNum, err := ourStore.GetLastBlockNumSeen()
+	if err != nil {
+		return nil, err
+	}
+	if storeBlockNum > chainOpts.ChainStartBlock {
+		chainOpts.ChainStartBlock = storeBlockNum
+	}
+
+	log.Info("Initializing chain service...")
+	ourChain, err := chainservice.NewEthChainService(chainOpts)
+	if err != nil {
+		return nil, err
+	}
+
+	node := nitroNode.New(
+		messageService,
+		ourChain,
+		ourStore,
+		&engine.PermissivePolicy{},
+	)
+
+	return &node, nil
+}