Magento provides many payment methods by default but sometime we need to add some custom payment methods . So in this blog I am explaining how do we create basic custom payment method.

First need to understand the structure of the files -

1) app/etc/modules/Custom_Paymentmethod.xml
2) app/code/local/Custom/Paymentmethod/etc/config.xml
3) app/code/local/Custom/Paymentmethod/etc/system.xml
4) app/code/local/Custom/Paymentmethod/sql/paymentmethod_setup/install-0.1.0.php
5) app/code/local/Custom/Paymentmethod/Helper/Data.php
6) app/code/local/Custom/Paymentmethod/Model/Paymentmethod.php
7) app/code/local/Custom/Paymentmethod/Block/Form/Paymentmethod.php
8) app/design/frontend/theme/default/template/paymentmethod/paymentmethod.phtml
9) app/code/local/Custom/Paymentmethod/Block/Info/Paymentmethod.php

We will create all files step by step -

1) We will create the module file "Custom_Paymentmethod.xml" in "app/etc/modules/" folder with the following content -

<?xml version="1.0"?>
<config>
    <modules>
        <Custom_Paymentmethod>
              <active>true</active>
              <codePool>local</codePool>       
              <depends>
                <Mage_Payment />
              </depends>
        </Custom_Paymentmethod>
      </modules>
</config>

2) Then we will create module configuration file "config.xml" in folder "app/code/local/Custom/Paymentmethod/etc/" folder with the following content -

    <?xml version="1.0"?>
    <config>
      <modules>
        <Custom_Paymentmethod>
          <version>0.1.0</version>
        </Custom_Paymentmethod>
      </modules>
  <global>
    <fieldsets>
      <sales_convert_quote_payment>
        <cstm_paymentamnt>
          <to_order_payment>*</to_order_payment>
        </cstm_paymentamnt>
      </sales_convert_quote_payment>
    </fieldsets>

    <helpers>
      <paymentmethod>
        <class>Custom_Paymentmethod_Helper</class>
      </paymentmethod>
    </helpers>

    <blocks>
      <paymentmethod>
        <class>Custom_Paymentmethod_Block</class>
      </paymentmethod>
    </blocks>

    <models>
      <paymentmethod>
        <class>Custom_Paymentmethod_Model</class>
      </paymentmethod>
    </models>

    <resources>
      <paymentmethod_setup>
        <setup>
          <module>Custom_Paymentmethod</module>
        </setup>
        <connection>
            <use>core_setup</use>
        </connection>
      </paymentmethod_setup>
      <paymentmethod_write>
        <use>core_write</use>
      </paymentmethod_write>
      <paymentmethod_read>
        <use>core_read</use>
      </paymentmethod_read>
    </resources>
  </global>

  <default>
    <payment>
      <paymentmethod>
        <active>1</active>
        <model>paymentmethod/paymentmethod</model>
        <order_status>pending</order_status>
        <title>PaymentMethod</title>
        <allowspecific>0</allowspecific>
        <payment_action>sale</payment_action>
      </paymentmethod>
    </payment>
  </default>

  <frontend>
    <routers>
      <paymentmethod>
        <use>standard</use>
        <args>
          <module>Custom_Paymentmethod</module>
          <frontName>paymentmethod</frontName>
        </args>
      </paymentmethod>
    </routers>
  </frontend>
</config>

3) Create module system configuration file needed for backend settings "system.xml" in folder "app/code/local/Custom/Paymentmethod/etc/" folder with the following content -

<?xml version="1.0"?>
<config>    
  <sections>
    <payment>
      <groups>
        <paymentmethod translate="label" module="paymentmethod">
          <label>New custom payment</label>
          <sort_order>100</sort_order>
          <show_in_default>1</show_in_default>
          <show_in_website>1</show_in_website>
          <show_in_store>0</show_in_store>
          <fields>
            <title translate="label">
              <label>Title</label>
              <frontend_type>text</frontend_type>
              <show_in_default>1</show_in_default>
              <show_in_website>1</show_in_website>
              <show_in_store>0</show_in_store>
              <sort_order>1</sort_order>
            </title>
            <active translate="label">
              <label>Enabled</label>
              <frontend_type>select</frontend_type>
              <source_model>adminhtml/system_config_source_yesno</source_model>
              <show_in_default>1</show_in_default>
              <show_in_website>1</show_in_website>
              <show_in_store>0</show_in_store>
              <sort_order>2</sort_order>
            </active>
            <order_status translate="label">
              <label>New order status</label>
              <frontend_type>select</frontend_type>
              <source_model>adminhtml/system_config_source_order_status</source_model>
              <show_in_default>1</show_in_default>
              <show_in_website>1</show_in_website>
              <show_in_store>0</show_in_store>
              <sort_order>3</sort_order>
            </order_status>

          </fields>
        </paymentmethod>
      </groups>
    </payment>
  </sections>
</config>

4) Now, we need to create the custom table fields to store the values. To modify the table we need to create the mysql installation file "install-0.1.0.php" in "app/code/local/Custom/Paymentmethod/sql/paymentmethod_setup/" folder with the following content -

<?php
$installer = $this;
$installer->startSetup();

$installer->run("
ALTER TABLE `{$installer->getTable('sales/quote_payment')}` 
ADD `cstm_paymentamnt` VARCHAR( 255 ) NOT NULL;

ALTER TABLE `{$installer->getTable('sales/order_payment')}` 
ADD `cstm_paymentamnt` VARCHAR( 255 ) NOT NULL;
");
$installer->endSetup();

5) Create helper file "Data.php" in "app/code/local/Custom/Paymentmethod/Helper/" with the following content -

<?php
class Custom_Paymentmethod_Helper_Data extends Mage_Core_Helper_Abstract
{}

6) Create model file "Paymentmethod.php" of the module inside folder "app/code/local/Custom/Paymentmethod/Model/" with the following content -

<?php
class Custom_Paymentmethod_Model_Paymentmethod extends Mage_Payment_Model_Method_Abstract
{
  protected $_code  = 'paymentmethod';
  protected $_formBlockType = 'paymentmethod/form_paymentmethod';
  protected $_infoBlockType = 'paymentmethod/info_paymentmethod';

  public function assignData($data)
  {

    if (!($data instanceof Varien_Object)) {
            $data = new Varien_Object($data);
    }

    $info = $this->getInfoInstance();

    if ($data->getCstmPaymentamnt())
    {
      $info->setCstmPaymentamnt($data->getCstmPaymentamnt());
    }


    return $this;
  }

  public function validate()
  {
    parent::validate();
    $info = $this->getInfoInstance();

    if (!$info->getCstmPaymentamnt())
    {
      $errorCode = 'invalid';
      $errorMsg = $this->_getHelper()->__("Payment amount is required.");
    }

    if ($errorMsg) 
    {
      Mage::throwException($errorMsg);
    }

    return $this;
  }
} 

7) Now, create block file "Paymentmethod.php" in which we assign template file to show content in "app/code/local/Custom/Paymentmethod/Block/Form/" folder with the following content -

<?php
class Custom_Paymentmethod_Block_Form_Paymentmethod extends Mage_Payment_Block_Form
{
    protected function _construct()
    {
        parent::_construct();
        $this->setTemplate('paymentmethod/form/paymentmethod.phtml');
    }
}

8) Create template file "paymentmethod.phtml" which is needed to show the payment form on selection of the payment method "app/design/frontend/theme/default/template/paymentmethod/" -

<?php $_code=$this->getMethodCode(); ?>
<div class="form-list" id="payment_form_<?php echo $_code; ?>" style="display:none;">
  <div>
    <label><?php echo $this->__('Custom Amount') ?>*</label>
    <span>
      <input type="text" title="<?php echo $this->__('Custom amount') ?>" name="payment[cstm_paymentamnt]" value="<?php echo $this->htmlEscape($this->getInfoData('cstm_paymentamnt')) ?>" id="<?php echo $_code ?>_cstm_paymntamnt" />
    </span>
  </div>
 </div>
<div>
    <?php echo $this->getMethod()->getConfigData('message');?>
</div>

9) Create file Block file "Paymentmethod.php" which is needed to show the custom amount price in sidebar of the checkout page "app/code/local/Custom/Paymentmethod/Block/Info/" with the following content -

<?php
class Custom_Paymentmethod_Block_Info_Paymentmethod extends Mage_Payment_Block_Info
{
  protected function _prepareSpecificInformation($transport = null)
  {
    if (null !== $this->_paymentSpecificInformation) 
    {
      return $this->_paymentSpecificInformation;
    }

        $info = $this->getInfo();

        $transport = new Varien_Object();
        $transport = parent::_prepareSpecificInformation($transport);

        $transport->addData(array(
            Mage::helper('payment')->__('Payment Amount') => $this->getInfo()->getCstmPaymentamnt(),
        ));

        return $transport;
  }
}