As an English speaker, I believe that "Can I pay in Swiss francs?" should be a correct translation too, but it was not accepted.
It means the same thing, but it doesn't quite match the sentence. "
mit Schweizer Franken"
with Swiss Francs.
But literal translation is not supposed to always work, especially when it comes to prepositions. Anyway, I've reported the 'pay in' version.
True, literal translation doesn't work in many cases, but the general guideline for translating (at least in Duo) is "Translate as literally as possible, as freely as necessary." So use the direct literal translation as much as possible while still retaining the original meaning.
Duo is trying to teach us German words and substituting "in" for "mit" instead of using "with" although it does mean pretty much the same thing is not an exact literal translation and could possibly confuse other learners.