Q: Unable to set up apple pay with my iCloud account

I have exactally the same issue.  Your description of the issue is dead on.  I have an escalation in with Apple and after several days of waiting on some feedback I feel like the Apple engineer's ego's are a bit overinflated.  I received a call back from my case worker today, he left a message stating he had feedback from tier 3 support and he would either call back tomorrow or I could call in with my case number.  It's already been A week and I am excited so I called in.  A week ago, I went through the process of providing details of everything I had already tried, and that I narrowed it down to an account issue.  They put me in touch with tier 2 and we again verified by doing everything you describe above and the tech told me he was entering detailed notes.  If it was a device issue, it would be restricted to a device.  I can sign out and sign in with a different iTunes account just fine, Apple Pay pops right up to the add card screen.  I even add the card in questions no problem.  I then sign out of iTunes, wipe the device, set up as new, sign in to iCloud with my problem account and "Failed to set up Apple Pay".  So today did I get a fix?  No, I got engineering asking Tier 2 to have me do all the same things I have already done, again, so frustrating.  I have too much money invested in that iTunes account to blow it away and start new at this point.  There is something corrupt on the server side for the account.  I am actually it is not just me, I just hope Apple actually takes some time this time to look deeper, and not at my device because it's not the device.  It's not the credit card, it's in their system side.  I did supply them with some logs today after running some tests but I am not to confident it has reached the level it needs too yet.  I'll keep you posted.   More than likely there will be a software update at some point but magically fixes the issue and we will never know what the problem actually was.  I have worked with Apple for more than six years and I do support for their products at the HQ of one of their biggest customers, for the leadership of the company.  I don't call unless I have exhausted all possibilities on this end, so without access to their back end, there is not much more I can do but work with them.  I hope if someone from Apple reads this, they realize their might be an "actual issue" here.  Until I have this working again, my time is valuable too, and I don't have time to repeat everything one a week to end up with the same result.

I have the same problem too.

Apple Pay stopped working one day when i tried to order an Uber.

Thought it was a card specific issue so I tried deleting and readding said card. No dice.

I have not been able to add a card to my account since despite resetting and switching phones.

This issue started when I was using iPhone 6 running iOS 9.3.4 and persists on an iPhone 7 running iOS 10.0.2.

I have the exact same problem, tried the exact same things, talked to Apple Care a few times. The last AC person said it sounded like a system-wide issue that will hopefully be resolved soon.

Anything new to report since you last posted?

I have the same case here Could not setup Apple Pay After updating to iOS10

It is very likely that something is wrong on the Apple/iCloud Side.

I  just grab a brand new device, set it up as a new iPhone, sign in with the account that I'm having that apple pay issue with. Same error is happening.

You're lucky. I just keep bouncing between different agent and support channels and, the solutions is just "Do an iCloud backup" and "Restore your iPhone to the latest software" Which I've already did a million times, in all sorts of combination.

I tried all possible remedies for this, until finally yesterday finding something that worked. I started by deleting all cards, then adding them to my Apple Watch first. After that, adding them To Apple Pay/wallet on the iPhone worked just fine. Now Apple Pay works perfectly on both devices, I have access to all my cards, and life is once again blissful joy in Apple land

Good to hear!

At this point I have removed and reset all of my devices to factory setting and setup as new. None of my card is linked to my devices and I have confirmed that on my appleid.apple.com.

I just received my iPhone 7 and setup as new. And tried to add card on all of my devices again.

It's still not working.