diff --git a/src/libs/actions/BankAccounts.ts b/src/libs/actions/BankAccounts.ts
index 199387367fdc..1807ba8ccaca 100644
--- a/src/libs/actions/BankAccounts.ts
+++ b/src/libs/actions/BankAccounts.ts
@@ -393,7 +393,7 @@ function deletePaymentBankAccount(bankAccountID: number, personalPolicyID: strin
     const bankAccountFailureData = {
         ...bankAccount,
         errors: getMicroSecondOnyxErrorWithTranslationKey('bankAccount.error.deletePaymentBankAccount'),
-        pendingAction: CONST.RED_BRICK_ROAD_PENDING_ACTION.DELETE,
+        pendingAction: null,
     };
 
     const onyxData: OnyxData<typeof ONYXKEYS.BANK_ACCOUNT_LIST | typeof ONYXKEYS.NVP_LAST_PAYMENT_METHOD> = {
diff --git a/src/pages/settings/Wallet/PaymentMethodList.tsx b/src/pages/settings/Wallet/PaymentMethodList.tsx
index 6b02aa0656cc..b85b203c3945 100644
--- a/src/pages/settings/Wallet/PaymentMethodList.tsx
+++ b/src/pages/settings/Wallet/PaymentMethodList.tsx
@@ -371,6 +371,7 @@ function PaymentMethodList({
                 isMethodActive,
                 iconRight: itemIconRight ?? expensifyIcons.ThreeDots,
                 shouldShowRightIcon,
+                canDismissError: true,
             };
         });
         return combinedPaymentMethods;
diff --git a/src/pages/settings/Wallet/PaymentMethodListItem.tsx b/src/pages/settings/Wallet/PaymentMethodListItem.tsx
index bca259a45b00..701473ec5cb2 100644
--- a/src/pages/settings/Wallet/PaymentMethodListItem.tsx
+++ b/src/pages/settings/Wallet/PaymentMethodListItem.tsx
@@ -17,6 +17,7 @@ import ONYXKEYS from '@src/ONYXKEYS';
 import type {BankIcon} from '@src/types/onyx/Bank';
 import type {Errors} from '@src/types/onyx/OnyxCommon';
 import type PaymentMethod from '@src/types/onyx/PaymentMethod';
+import {isEmptyObject} from '@src/types/utils/EmptyObject';
 import type IconAsset from '@src/types/utils/IconAsset';
 
 type PaymentMethodItem = PaymentMethod & {
@@ -61,6 +62,7 @@ function dismissError(item: PaymentMethodItem) {
         return;
     }
 
+    const hasErrors = !isEmptyObject(item.errors);
     const isBankAccount = item.accountType === CONST.PAYMENT_METHODS.PERSONAL_BANK_ACCOUNT;
     const paymentList = isBankAccount ? ONYXKEYS.BANK_ACCOUNT_LIST : ONYXKEYS.FUND_LIST;
     const paymentID = isBankAccount ? item.accountData?.bankAccountID : item.accountData?.fundID;
@@ -70,7 +72,7 @@ function dismissError(item: PaymentMethodItem) {
         return;
     }
 
-    if (item.pendingAction === CONST.RED_BRICK_ROAD_PENDING_ACTION.DELETE) {
+    if (item.pendingAction === CONST.RED_BRICK_ROAD_PENDING_ACTION.DELETE || hasErrors) {
         clearDeletePaymentMethodError(paymentList, paymentID);
         if (!isBankAccount) {
             clearDeletePaymentMethodError(ONYXKEYS.FUND_LIST, paymentID);
@@ -116,8 +118,7 @@ function PaymentMethodListItem({item, shouldShowDefaultBadge, threeDotsMenuItems
             onClose={item.canDismissError ? () => dismissError(item) : undefined}
             pendingAction={item.pendingAction}
             errors={item.errors}
-            errorRowStyles={styles.ph6}
-            shouldShowErrorMessages={false}
+            errorRowStyles={styles.paymentMethodErrorRow}
         >
             <MenuItem
                 onPress={handleRowPress}
diff --git a/src/styles/index.ts b/src/styles/index.ts
index 7506658f0865..c515b71bea29 100644
--- a/src/styles/index.ts
+++ b/src/styles/index.ts
@@ -5629,6 +5629,9 @@ const staticStyles = (theme: ThemeColors) =>
             width: 179,
             height: 180,
         },
+        paymentMethodErrorRow: {
+            paddingHorizontal: variables.iconSizeMenuItem + variables.iconSizeNormal / 2,
+        },
     }) satisfies StaticStyles;
 
 const dynamicStyles = (theme: ThemeColors) =>