PayPal IPN Handler for CakePHP

controller.php

<?php
App::uses('HttpSocket', 'Network/Http');

/* inside controller */

/**
 * PayPal IPN Notification parser
 * Checks if the notification is valid
 * @see https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=developer/e_howto_admin_IPNIntro
 * @see https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=developer/e_howto_html_IPNandPDTVariables
 * @return mixed The data for verifying and updating the user purchase
 */
	protected function _parse_paypal() {
		$HttpSocket = new HttpSocket();

		$validationArray = array(
			'cmd' => '_notify-validate',
		);
		$validationArray = array_merge($validationArray, $this->request->data);

		$HttpSocket->get(Configure::read('Paypal.url'), $validationArray);
		if($HttpSocket->response['body'] !== 'VERIFIED') {
			$this->log('PayPal IPN Error: '. RequestHandlerComponent::getClientIp() .' has sent an invalid notification', 'purchases');
			die('The IPN notification is invalid');
		}

		if($validationArray['mc_currency'] !== 'USD') {
			$this->log('PayPal IPN Error: '. $validationArray['invoice'] .' reported currency '. $validationArray['mc_currency'], 'purchases');
			die;
		}

		switch(strtolower($validationArray['payment_status'])) {
			case 'completed':
				$status = PURCHASE_STATUS_OK;
				break;
			case 'failed':
				$status = PURCHASE_STATUS_FAILED;
				break;
			case 'denied':
				$status = PURCHASE_STATUS_DENIED;
				break;
			case 'pending':
				$status = PURCHASE_STATUS_PENDING;
				// TODO: check the pending_reason
				break;
			case 'refunded':
				$status = PURCHASE_STATUS_REFUNDED;
				break;
			default: 
				$this->log('PayPal IPN Error: Received payment_status '. $validationArray['payment_status'] .' is not handled.', 'purchases');
				die;
		}

		$paymentData = array(
			'id'            => $validationArray['invoice'],
			'product_id'    => $validationArray['item_number'],
			'invoice_id'    => $validationArray['txn_id'],
			'price'         => $validationArray['mc_gross'],
			'payer_email'   => $validationArray['payer_email'],
			'status'        => $status,
			'ipn_data'      => json_encode($validationArray),
		);

		return $paymentData;
	}

form.ctp

<?php
$inputs = array(
	'cmd'           => '_xclick',
	'txn_type'      => 'web_accept',
	'business'      => $paypalVars['owner'],
	'quantity'      => '1',
	'item_name'     => $purchase['Product']['name'],
	'item_number'   => $purchase['Product']['id'],
	'amount'        => $purchase['Purchase']['price'],
	'invoice'       => $purchase['Purchase']['id'],
	'notify_url'    => Router::url(array('controller' => 'purchases', 'action' => 'notify', 'paypal'), true),
	'return'        => Router::url(array('controller' => 'purchases', 'action' => 'thanks', $purchase['Purchase']['id']), true),
	'cancel_return' => Router::url(array('controller' => 'purchases', 'action' => 'cancel'), true),
);

echo $this->Form->create(false, array(
	'url' => Configure::read('Paypal.url'),
));
foreach($inputs as $input => $value) {
	echo $this->Form->hidden($input, array('name' => $input, 'value' => $value));
}
echo $this->Form->end('Submit');