Disable payment gateway for shipping method

functions.php

function disable_payment_gateways( $gateways ) {
	$chosen_shipping_rates = WC()->session->get( 'chosen_shipping_methods' );
	// if 'local delivery' is chosen as shipping rate
	if ( in_array( 'local_delivery', $chosen_shipping_rates ) ) :
		// Removing bank transfer payment gateway, you can unset other gateways too.
		unset( $gateways['bacs'] );
	endif;
	return $gateways;
}
add_filter( 'woocommerce_available_payment_gateways', 'disable_payment_gateways' );