and another update...
There appear to be multiple levels of validation which are causing problems.
One layer seems to be validating the data you enter prior to sending off to the credit card provider for validation, this seems to need at least a 5 digit postcode in the postcode field. As Australian postcodes are four digits (some with a leading zero) this check fails and seems to give the message advising of an error but does not say where.
If you enter a 5 digit postcode the data is sent off to the next level of validation which actually seems to check with your credit card provider and charge your card US$1. It then comes back with an error presumably because the 5 digit postcode does not match what is on file with the credit card company.
So you get an authorisation error message implying the card is invalid but your card is also charged which would imply that it is valid...
If you try the 5 digit postcode more than 3 times it gives you an error advising that you can only change your credit card details 3 times in 24 hours.
I have passed all the details on to the iAd team but no response as yet.
Now I have to try and get my money back, I have been chatting and talking with Apple Support for 3.5 hours so far and no resolution. The transactions show on the Apple Pay transaction list as this is linked to the card I am using but not on Apple iAd.