diff --git a/modules/ppcp-wc-gateway/services.php b/modules/ppcp-wc-gateway/services.php
index 82c086db9..fa9b4f69b 100644
--- a/modules/ppcp-wc-gateway/services.php
+++ b/modules/ppcp-wc-gateway/services.php
@@ -783,7 +783,7 @@ return array(
 				'desc_tip'     => true,
 				'label'        => __( 'Moves the alternative payment methods from the PayPal gateway into their own dedicated gateways.', 'woocommerce-paypal-payments' ),
 				'description'  => __( 'By default, alternative payment methods are displayed in the Standard Payments payment gateway. This setting creates a gateway for each alternative payment method.', 'woocommerce-paypal-payments' ),
-				'default'      => true,
+				'default'      => false,
 				'screens'      => array(
 					State::STATE_START,
 					State::STATE_ONBOARDED,
diff --git a/modules/ppcp-wc-gateway/src/WCGatewayModule.php b/modules/ppcp-wc-gateway/src/WCGatewayModule.php
index f01084da9..53b3b9b09 100644
--- a/modules/ppcp-wc-gateway/src/WCGatewayModule.php
+++ b/modules/ppcp-wc-gateway/src/WCGatewayModule.php
@@ -497,6 +497,18 @@ class WCGatewayModule implements ModuleInterface {
 				return $fields;
 			}
 		);
+
+		add_action(
+			'woocommerce_paypal_payments_gateway_migrate',
+			function( string $installed_plugin_version ) use ( $c ) {
+				$settings = $c->get( 'wcgateway.settings' );
+				assert( $settings instanceof ContainerInterface );
+
+				if ( ! $installed_plugin_version && $settings->has( 'allow_local_apm_gateways' ) ) {
+					$settings->set( 'allow_local_apm_gateways', true );
+				}
+			}
+		);
 	}
 
 	/**
diff --git a/woocommerce-paypal-payments.php b/woocommerce-paypal-payments.php
index fcf66ae12..91d085147 100644
--- a/woocommerce-paypal-payments.php
+++ b/woocommerce-paypal-payments.php
@@ -106,7 +106,7 @@ define( 'PPCP_PAYPAL_BN_CODE', 'Woo_PPCP' );
 				/**
 				 * The hook fired when the plugin is installed or updated.
 				 */
-				do_action( 'woocommerce_paypal_payments_gateway_migrate' );
+				do_action( 'woocommerce_paypal_payments_gateway_migrate', $installed_plugin_version );
 
 				if ( $installed_plugin_version ) {
 					/**