diff --git a/src/pages/iou/request/step/IOURequestStepMerchant.tsx b/src/pages/iou/request/step/IOURequestStepMerchant.tsx
index b9816c7daf7b..870e6085c22b 100644
--- a/src/pages/iou/request/step/IOURequestStepMerchant.tsx
+++ b/src/pages/iou/request/step/IOURequestStepMerchant.tsx
@@ -63,7 +63,8 @@ function IOURequestStepMerchant({
     const merchant = ReportUtils.getTransactionDetails(isEditingSplitBill && !isEmptyObject(splitDraftTransaction) ? splitDraftTransaction : transaction)?.merchant;
     const isEmptyMerchant = merchant === '' || merchant === CONST.TRANSACTION.PARTIAL_TRANSACTION_MERCHANT;
 
-    const isMerchantRequired = ReportUtils.isExpenseRequest(report) || transaction?.participants?.some((participant) => !!participant.isPolicyExpenseChat);
+    const isMerchantRequired =
+        ReportUtils.isPolicyExpenseChat(report) || ReportUtils.isExpenseRequest(report) || transaction?.participants?.some((participant) => !!participant.isPolicyExpenseChat);
 
     const navigateBack = () => {
         Navigation.goBack(backTo);