diff --git a/src/components/MoneyReportHeader.tsx b/src/components/MoneyReportHeader.tsx
index 12da12b8b15d..fdf6f8edd825 100644
--- a/src/components/MoneyReportHeader.tsx
+++ b/src/components/MoneyReportHeader.tsx
@@ -113,10 +113,15 @@ function MoneyReportHeader({policy, report: moneyRequestReport, transactionThrea
     const isArchivedReport = ReportUtils.isArchivedRoomWithID(moneyRequestReport?.reportID);
     const [archiveReason] = useOnyx(`${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${moneyRequestReport?.reportID ?? '-1'}`, {selector: ReportUtils.getArchiveReason});
 
-    const shouldShowPayButton = useMemo(
-        () => IOU.canIOUBePaid(moneyRequestReport, chatReport, policy, transaction ? [transaction] : undefined),
+    const getCanIOUBePaid = useCallback(
+        (onlyShowPayElsewhere = false) => IOU.canIOUBePaid(moneyRequestReport, chatReport, policy, transaction ? [transaction] : undefined, onlyShowPayElsewhere),
         [moneyRequestReport, chatReport, policy, transaction],
     );
+    const canIOUBePaid = useMemo(() => getCanIOUBePaid(), [getCanIOUBePaid]);
+
+    const onlyShowPayElsewhere = useMemo(() => !canIOUBePaid && getCanIOUBePaid(true), [canIOUBePaid, getCanIOUBePaid]);
+
+    const shouldShowPayButton = canIOUBePaid || onlyShowPayElsewhere;
 
     const shouldShowApproveButton = useMemo(() => IOU.canApproveIOU(moneyRequestReport, policy), [moneyRequestReport, policy]);
 
@@ -292,6 +297,7 @@ function MoneyReportHeader({policy, report: moneyRequestReport, transactionThrea
                 {shouldShowSettlementButton && !shouldUseNarrowLayout && (
                     <View style={styles.pv2}>
                         <SettlementButton
+                            onlyShowPayElsewhere={onlyShowPayElsewhere}
                             currency={moneyRequestReport?.currency}
                             confirmApproval={confirmApproval}
                             policyID={moneyRequestReport?.policyID}
@@ -345,6 +351,7 @@ function MoneyReportHeader({policy, report: moneyRequestReport, transactionThrea
                 <View style={[styles.dFlex, styles.flexColumn, styles.gap3, styles.pb3, styles.ph5, styles.borderBottom]}>
                     {shouldShowSettlementButton && shouldUseNarrowLayout && (
                         <SettlementButton
+                            onlyShowPayElsewhere={onlyShowPayElsewhere}
                             currency={moneyRequestReport?.currency}
                             confirmApproval={confirmApproval}
                             policyID={moneyRequestReport?.policyID}
diff --git a/src/components/ReportActionItem/ReportPreview.tsx b/src/components/ReportActionItem/ReportPreview.tsx
index 87f06f43d82a..cadfe5786079 100644
--- a/src/components/ReportActionItem/ReportPreview.tsx
+++ b/src/components/ReportActionItem/ReportPreview.tsx
@@ -319,12 +319,14 @@ function ReportPreview({
     ]);
 
     const bankAccountRoute = ReportUtils.getBankAccountRoute(chatReport);
-
-    const shouldShowPayButton = useMemo(
-        () => isPaidAnimationRunning || IOU.canIOUBePaid(iouReport, chatReport, policy, allTransactions),
-        [isPaidAnimationRunning, iouReport, chatReport, policy, allTransactions],
+    const getCanIOUBePaid = useCallback(
+        (onlyShowPayElsewhere = false) => IOU.canIOUBePaid(iouReport, chatReport, policy, allTransactions, onlyShowPayElsewhere),
+        [iouReport, chatReport, policy, allTransactions],
     );
 
+    const canIOUBePaid = useMemo(() => getCanIOUBePaid(), [getCanIOUBePaid]);
+    const onlyShowPayElsewhere = useMemo(() => !canIOUBePaid && getCanIOUBePaid(true), [canIOUBePaid, getCanIOUBePaid]);
+    const shouldShowPayButton = isPaidAnimationRunning || canIOUBePaid || onlyShowPayElsewhere;
     const shouldShowApproveButton = useMemo(() => IOU.canApproveIOU(iouReport, policy), [iouReport, policy]);
 
     const shouldDisableApproveButton = shouldShowApproveButton && !ReportUtils.isAllowedToApproveExpenseReport(iouReport);
@@ -518,6 +520,7 @@ function ReportPreview({
                                 </View>
                                 {shouldShowSettlementButton && (
                                     <AnimatedSettlementButton
+                                        onlyShowPayElsewhere={onlyShowPayElsewhere}
                                         isPaidAnimationRunning={isPaidAnimationRunning}
                                         onAnimationFinish={stopAnimation}
                                         formattedAmount={getSettlementAmount() ?? ''}
diff --git a/src/components/SettlementButton/index.tsx b/src/components/SettlementButton/index.tsx
index 35e152ec99d8..8d3add9b6fd0 100644
--- a/src/components/SettlementButton/index.tsx
+++ b/src/components/SettlementButton/index.tsx
@@ -58,6 +58,7 @@ function SettlementButton({
     useKeyboardShortcuts = false,
     onPaymentOptionsShow,
     onPaymentOptionsHide,
+    onlyShowPayElsewhere,
 }: SettlementButtonProps) {
     const {translate} = useLocalize();
     const {isOffline} = useNetwork();
@@ -102,6 +103,10 @@ function SettlementButton({
             return [approveButtonOption];
         }
 
+        if (onlyShowPayElsewhere) {
+            return [paymentMethods[CONST.IOU.PAYMENT_TYPE.ELSEWHERE]];
+        }
+
         // To achieve the one tap pay experience we need to choose the correct payment type as default.
         if (canUseWallet) {
             buttonOptions.push(paymentMethods[CONST.IOU.PAYMENT_TYPE.EXPENSIFY]);
@@ -173,6 +178,7 @@ function SettlementButton({
         shouldShowPayElsewhereOption,
         chatReport,
         onPress,
+        onlyShowPayElsewhere,
     ]);
 
     const selectPaymentType = (event: KYCFlowEvent, iouPaymentType: PaymentMethodType, triggerKYCFlow: TriggerKYCFlow) => {
diff --git a/src/components/SettlementButton/types.ts b/src/components/SettlementButton/types.ts
index 0a26aec914e0..b3ad0c1c9bd0 100644
--- a/src/components/SettlementButton/types.ts
+++ b/src/components/SettlementButton/types.ts
@@ -87,6 +87,9 @@ type SettlementButtonProps = {
 
     /** Whether to use keyboard shortcuts for confirmation or not */
     useKeyboardShortcuts?: boolean;
+
+    /** Whether we only show pay elsewhere button */
+    onlyShowPayElsewhere?: boolean;
 };
 
 export default SettlementButtonProps;
diff --git a/src/libs/ReportUtils.ts b/src/libs/ReportUtils.ts
index 687ef177609e..2885593b52ae 100644
--- a/src/libs/ReportUtils.ts
+++ b/src/libs/ReportUtils.ts
@@ -1683,7 +1683,7 @@ function isOneOnOneChat(report: OnyxEntry<Report>): boolean {
  * Checks if the current user is a payer of the expense
  */
 
-function isPayer(session: OnyxEntry<Session>, iouReport: OnyxEntry<Report>) {
+function isPayer(session: OnyxEntry<Session>, iouReport: OnyxEntry<Report>, onlyShowPayElsewhere = false) {
     const isApproved = isReportApproved(iouReport);
     const policy = allPolicies?.[`${ONYXKEYS.COLLECTION.POLICY}${iouReport?.policyID}`] ?? null;
     const policyType = policy?.type;
@@ -1694,7 +1694,7 @@ function isPayer(session: OnyxEntry<Session>, iouReport: OnyxEntry<Report>) {
             const isReimburser = session?.email === policy?.achAccount?.reimburser;
             return (!policy?.achAccount?.reimburser || isReimburser) && (isApproved || isManager);
         }
-        if (policy?.reimbursementChoice === CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_MANUAL) {
+        if (policy?.reimbursementChoice === CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_MANUAL || onlyShowPayElsewhere) {
             return isAdmin && (isApproved || isManager);
         }
         return false;
diff --git a/src/libs/actions/IOU.ts b/src/libs/actions/IOU.ts
index 03cfe860ddb2..9c03dd2af8fc 100644
--- a/src/libs/actions/IOU.ts
+++ b/src/libs/actions/IOU.ts
@@ -6930,6 +6930,7 @@ function canIOUBePaid(
     chatReport: OnyxTypes.OnyxInputOrEntry<OnyxTypes.Report>,
     policy: OnyxTypes.OnyxInputOrEntry<OnyxTypes.Policy>,
     transactions?: OnyxTypes.Transaction[],
+    onlyShowPayElsewhere = false,
 ) {
     const isPolicyExpenseChat = ReportUtils.isPolicyExpenseChat(chatReport);
     const reportNameValuePairs = ReportUtils.getReportNameValuePairs(chatReport?.reportID);
@@ -6941,7 +6942,12 @@ function canIOUBePaid(
     }
 
     if (policy?.reimbursementChoice === CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_NO) {
-        return false;
+        if (!onlyShowPayElsewhere) {
+            return false;
+        }
+        if (iouReport?.statusNum !== CONST.REPORT.STATUS_NUM.SUBMITTED) {
+            return false;
+        }
     }
 
     if (ReportUtils.isInvoiceReport(iouReport)) {
@@ -6960,6 +6966,7 @@ function canIOUBePaid(
             accountID: userAccountID,
         },
         iouReport,
+        onlyShowPayElsewhere,
     );
 
     const isOpenExpenseReport = isPolicyExpenseChat && ReportUtils.isOpenExpenseReport(iouReport);
@@ -6969,7 +6976,6 @@ function canIOUBePaid(
     const shouldBeApproved = canApproveIOU(iouReport, policy);
 
     const isPayAtEndExpenseReport = ReportUtils.isPayAtEndExpenseReport(iouReport?.reportID, transactions);
-
     return (
         isPayer &&
         !isOpenExpenseReport &&