At this point in time, Payments2Us does not support working with State and Country/Territory picklist enabled.

If your organisation has State and Country/Territory enabled, then you can do one of the following:

• Disable State and Country/Territory.  To do this, go to setup (Cog - top right corner), then search "State and Country/Territory", the select Disable Button.
• Add a new State and Country/Territory. To do this, go to setup (Cog - top right corner), then search "State and Country/Territory", then press Configure "State and Country/Territory picklist" link.
• Edit the Payment Txn record that has the invalid State/Country and update the State or Country to be a validate value.  Also change the "Status" to "Receipting Complete" and save.
• Add a Flow related to the Payment Txn, when the Status is "Receipting Complete".  The Flow changes looks for commonly entered incorrect values and updates the States/Country with a correct value.  NOTE: Our standard support does not provide assistance for setting up Flows.
• If you are only using States with one country, then you could add a new Picklist field to the Payment Txn with a list of  States, then create a Flow that copies this new value to MailingState on the Payment Txn when the status is at Receipting Complete and the new field has a value in it.  
  See procedure How to add custom fields on a web form for more details.
  NOTE: Our standard support does not provide assistance for setting up Flows.