Apple Pay doesn’t work on new Iphone 11

Very frustrating. From your recent post, I understand that your phone is with Apple service now. When you get it back, do not load the backup. Just set it up as a new phone and use it like that for a week (assuming you use Apple Pay frequently). See how the Apple Pay works.

1. If Apple Pay works, then it is something that happens when you do the restore. Then you can do what @askbarnabas said and NOT do a restore--just set up your iCloud. You will lose SMS messages and call records, but not photos or e-mail. You will be all set with a working phone and Apple Pay.
2. If Apple Pay stops working again, then you can tell Apple that it is the phone hardware, and at least you will have saved yourself the time and trouble of restoring it only to have the same issue. When you get the replacement/repaired phone, you can restore from your backup. You will only lose the SMS messages and call records from the time of your last backup.

If you are using iCloud you do not need to set up your device from a backup. Your backup is corrupt and causing you issues therefore it needs to not be used. All of your notes and pictures are stored in iCloud if you are using it so you can set your device up as new and then open the App Store and download all the apps you had before with no issues.

Actually, there are items, such as SMS, NOT stored in iCloud that some of us want to keep. These are available in a backup. I am not sure the problem is the backup. Why would Apple Pay work for 2 weeks with the OP's configuration and then suddenly not work?

I am having an issue with Apple Pay with Apple's OWN CARD on my iPhone X, which I've had for 2 years now. I've successfully used Apple Pay with my MasterCard with another bank during that time at multiple stores. I used Apple Pay with the Apple Card a couple of times with no problem. Now it's communicating with the terminal but obviously having a handshake issue because I get a "not authorized" message from the terminal. I am able to use the physical card for purchases, so there is no issue with the account.

I very much suspect the last OS update hosed it. Am I going to reset my phone completely to try to fix it? No I am not. I am going to use my MasterCard and wait for Apple to get its act together and issue an update that (silently) fixes the issue.

Yup, it gets corrupted when you update your phone. Then there is no way to roll back the update and you're stuck until the fix comes out.

There are any number of reason how the software could become corrupt. If you try the steps I told you and it still does not work then please, ask more questions. You asked for help and I gave you the steps to take.

Sometimes software can get corrupted and there are steps you can take to get your device working again. Taking a few minutes to try a few things is not unreasonable. What you decide to do is up to you. Most people perform these steps and have perfectly working devices.

What did the phone say or the app

Everything I want you to try is free. Do you normally have a severe distrust of people trying to help you or is it just this forum?

Just to follow up on this discussion, I took my iPhone X to the Apple store when I was nearby for another reason (store is 1.5 hours from my home). I asked the Genius Bar tech to test the NFC. It worked perfectly with both my old MasterCard and with the Apple Card that was giving me an issue. No device reset needed. I do not know what the issue was at the store where I had the problem, but it was not my phone. Glad I didn't go through the hassle of resetting.