Why does my Apple Pay ask for my social security number

See the information in Identity verification for Apple Cash - Apple Support

including the following from that link:

Person to person payments and the Apple Cash card are services provided by Green Dot Bank, member FDIC, a regulated financial institution. Green Dot Bank is required by federal law to verify the identity of its customers.

To verify your identity, Green Dot Bank will request social security numbers and other personal information to ensure that customers are eligible to use the service.