Unable to use Vanilla Visa Gift Card for payment

If you are trying to redeem a Vanilla gift card to your Apple Account, that will not work. It is also unlikely you can add it as a payment type since it is not a credit or bank debit card. You would need to go a store where you can use it to buy Apple gift cards and then redeem those to your account.

The article "What type of gift card do I have?" explains the different kinds of gift cards Apple uses, has links on how to redeem them, and what can be purchased with each kind. Click on the link --> What type of gift card do I have? - Apple Support

Ref:

Payment methods that you can use with your Apple ID - Apple Support

Vanilla Visa Gift Card is a prepaid debit card and some cards are issued by banks that do not support Apple Pay and/or subscriptions. You’ll need a different payment method.