"No document category exists for the selected payment document or payment method" in Create Payment

When making a payment through Create payment in Payables, I select the Business Unit, the party and the internal account. then I can't see the payment method in the list of value and I get the following error message:
No document category exists for the selected payment document or payment method.

The process works for another BU. I checked the setup but still can't find where is the issue

The sequence is created
the sequencing is allowed in GL options
Payment method is created
payment document is created in the bank account and assigned to the correct sequence
payment method is assigned to the business unit