Hide payment method based on product type in WooCommerce

Here is an example with a custom hooked function in woocommerce_available_payment_gateways filter hook, where I can disable payment gateways based on the cart items (product type):

add_filter('woocommerce_available_payment_gateways', 'conditional_payment_gateways', 10, 1);
function conditional_payment_gateways( $available_gateways ) {
    // Not in backend (admin)
    if( is_admin() )
        return $available_gateways;

    foreach (WC()->cart->get_cart() as $cart_item_key => $cart_item ) {
        $prod_variable = $prod_simple = $prod_subscription = false;
        // Get the WC_Product object
        $product = wc_get_product($cart_item['product_id']);
        // Get the product types in cart (example)
        if($product->is_type('simple')) $prod_simple = true;
        if($product->is_type('variable')) $prod_variable = true;
        if($product->is_type('subscription')) $prod_subscription = true;
    }
    // Remove Cash on delivery (cod) payment gateway for simple products
    if($prod_simple)
        unset($available_gateways['cod']); // unset 'cod'
    // Remove Paypal (paypal) payment gateway for variable products
    if($prod_variable)
        unset($available_gateways['paypal']); // unset 'paypal'
    // Remove Bank wire (Bacs) payment gateway for subscription products
    if($prod_subscription)
        unset($available_gateways['bacs']); // unset 'bacs'

    return $available_gateways;
}

Code goes in function.php file of your active child theme (or theme) or also in any plugin file.

All code is tested on Woocommerce 3+ and works.