He said his boss Andy Coulson set up payments "to facilitate" the activities of investigator Glenn Mulcaire.
Goodman and Mulcaire were arrested for hacking in August 2006 and pleaded guilty, the Old Bailey was told.
He yesterday told the hacking trial he was put under pressure by Mr Coulson and company lawyers to say he was the only hacker.
Goodman, 56, and Mr Coulson, 46, deny conspiracy to commit misconduct in public office. Mr Coulson denies conspiring to hack phones. The trial continues.