diff --git a/packages/backend/src/index.ts b/packages/backend/src/index.ts
index 1f429f2262..db0b4515af 100644
--- a/packages/backend/src/index.ts
+++ b/packages/backend/src/index.ts
@@ -463,7 +463,8 @@ export function initIocContainer(
     return createPaymentMethodHandlerService({
       logger: await deps.use('logger'),
       knex: await deps.use('knex'),
-      ilpPaymentService: await deps.use('ilpPaymentService')
+      ilpPaymentService: await deps.use('ilpPaymentService'),
+      localPaymentService: await deps.use('localPaymentService')
     })
   })
 
diff --git a/packages/backend/src/payment-method/handler/service.test.ts b/packages/backend/src/payment-method/handler/service.test.ts
index 2a80feed5c..a28e20b2b4 100644
--- a/packages/backend/src/payment-method/handler/service.test.ts
+++ b/packages/backend/src/payment-method/handler/service.test.ts
@@ -15,12 +15,14 @@ import { createReceiver } from '../../tests/receiver'
 import { IlpPaymentService } from '../ilp/service'
 import { truncateTables } from '../../tests/tableManager'
 import { createOutgoingPaymentWithReceiver } from '../../tests/outgoingPayment'
+import { LocalPaymentService } from '../local/service'
 
 describe('PaymentMethodHandlerService', (): void => {
   let deps: IocContract<AppServices>
   let appContainer: TestContainer
   let paymentMethodHandlerService: PaymentMethodHandlerService
   let ilpPaymentService: IlpPaymentService
+  let localPaymentService: LocalPaymentService
 
   beforeAll(async (): Promise<void> => {
     deps = initIocContainer(Config)
@@ -28,6 +30,7 @@ describe('PaymentMethodHandlerService', (): void => {
 
     paymentMethodHandlerService = await deps.use('paymentMethodHandlerService')
     ilpPaymentService = await deps.use('ilpPaymentService')
+    localPaymentService = await deps.use('localPaymentService')
   })
 
   afterEach(async (): Promise<void> => {
@@ -64,6 +67,30 @@ describe('PaymentMethodHandlerService', (): void => {
 
       expect(ilpPaymentServiceGetQuoteSpy).toHaveBeenCalledWith(options)
     })
+    test('calls lcaolPaymentService for local payment type', async (): Promise<void> => {
+      const asset = await createAsset(deps)
+      const walletAddress = await createWalletAddress(deps, {
+        assetId: asset.id
+      })
+
+      const options: StartQuoteOptions = {
+        walletAddress,
+        receiver: await createReceiver(deps, walletAddress),
+        debitAmount: {
+          assetCode: 'USD',
+          assetScale: 2,
+          value: 100n
+        }
+      }
+
+      const localPaymentServiceGetQuoteSpy = jest
+        .spyOn(localPaymentService, 'getQuote')
+        .mockImplementationOnce(jest.fn())
+
+      await paymentMethodHandlerService.getQuote('LOCAL', options)
+
+      expect(localPaymentServiceGetQuoteSpy).toHaveBeenCalledWith(options)
+    })
   })
 
   describe('pay', (): void => {
@@ -101,5 +128,39 @@ describe('PaymentMethodHandlerService', (): void => {
 
       expect(ilpPaymentServicePaySpy).toHaveBeenCalledWith(options)
     })
+    test('calls localPaymentService for local payment type', async (): Promise<void> => {
+      const asset = await createAsset(deps)
+      const walletAddress = await createWalletAddress(deps, {
+        assetId: asset.id
+      })
+      const { receiver, outgoingPayment } =
+        await createOutgoingPaymentWithReceiver(deps, {
+          sendingWalletAddress: walletAddress,
+          receivingWalletAddress: walletAddress,
+          method: 'ilp',
+          quoteOptions: {
+            debitAmount: {
+              assetCode: walletAddress.asset.code,
+              assetScale: walletAddress.asset.scale,
+              value: 100n
+            }
+          }
+        })
+
+      const options: PayOptions = {
+        receiver,
+        outgoingPayment,
+        finalDebitAmount: outgoingPayment.debitAmount.value,
+        finalReceiveAmount: outgoingPayment.receiveAmount.value
+      }
+
+      const localPaymentServicePaySpy = jest
+        .spyOn(localPaymentService, 'pay')
+        .mockImplementationOnce(jest.fn())
+
+      await paymentMethodHandlerService.pay('LOCAL', options)
+
+      expect(localPaymentServicePaySpy).toHaveBeenCalledWith(options)
+    })
   })
 })
diff --git a/packages/backend/src/payment-method/handler/service.ts b/packages/backend/src/payment-method/handler/service.ts
index 670d46ac4a..c7bb2dfc0e 100644
--- a/packages/backend/src/payment-method/handler/service.ts
+++ b/packages/backend/src/payment-method/handler/service.ts
@@ -4,6 +4,7 @@ import { WalletAddress } from '../../open_payments/wallet_address/model'
 import { Receiver } from '../../open_payments/receiver/model'
 import { BaseService } from '../../shared/baseService'
 import { IlpPaymentService } from '../ilp/service'
+import { LocalPaymentService } from '../local/service'
 
 export interface StartQuoteOptions {
   walletAddress: WalletAddress
@@ -33,7 +34,7 @@ export interface PaymentMethodService {
   pay(payOptions: PayOptions): Promise<void>
 }
 
-export type PaymentMethod = 'ILP'
+export type PaymentMethod = 'ILP' | 'LOCAL'
 
 export interface PaymentMethodHandlerService {
   getQuote(
@@ -45,12 +46,14 @@ export interface PaymentMethodHandlerService {
 
 interface ServiceDependencies extends BaseService {
   ilpPaymentService: IlpPaymentService
+  localPaymentService: LocalPaymentService
 }
 
 export async function createPaymentMethodHandlerService({
   logger,
   knex,
-  ilpPaymentService
+  ilpPaymentService,
+  localPaymentService
 }: ServiceDependencies): Promise<PaymentMethodHandlerService> {
   const log = logger.child({
     service: 'PaymentMethodHandlerService'
@@ -58,11 +61,13 @@ export async function createPaymentMethodHandlerService({
   const deps: ServiceDependencies = {
     logger: log,
     knex,
-    ilpPaymentService
+    ilpPaymentService,
+    localPaymentService
   }
 
   const paymentMethods: { [key in PaymentMethod]: PaymentMethodService } = {
-    ILP: deps.ilpPaymentService
+    ILP: deps.ilpPaymentService,
+    LOCAL: deps.localPaymentService
   }
 
   return {