Apple Pay is the way to pay. It replaces your physical cards and cash with a method of payment that is private, easier and safer. Whether you pay in a store, on a website or in an app. This is the new payment.
it is actually the same as paying contactless with your bank card, only via the iPhone.
See -> Use Apple Pay for contactless payments on iPhone
Use Apple Pay for contactless payments on iPhone – Apple Support (UK)
Learn where to use Apple Pay
Learn where to use Apple Pay - Apple Support
And yes contact your bank, they can find out who the merchant is (name, address & account number) that has collected the amount from your bank account, and when.
Depending on your bank, they can collect the amount back within 30 days.
Ask also your bank to block your card, and ask a new card.
Also report to the police.