The configuration in "Sales -> Payment Services -> Payment Template" is not related to the credit card IFrame (Flex Checkout).

This setting only applies to payment methods that would usually cause a redirection to an external payment page (like Paypal, iDeal, Sofort, etc.).

Payment Template configuration

To use the IFrame for credit cards (Flex Checkout), go to "Sales -> Payment Methodsand enable the payment method "CC Direct Link". This is independent of the above configuration.

If you want to change the styling of the IFrame, please see this article.