I spoke to apple support and they were saying that it was changes in the way the iPhone 7 handles apple pay security that some apps/merchants have not updated to be compatible with it.
"Spoke to my Senior Advisor about this and this seems to be a security feature that can not be turned off."
"It is a feature on the IPhone 7 I have looked into if this is the way that it is designed and it seems like it is."
I clarified that it was working fine in some apple pay supported apps and this was subsequent conversation:
"Are they using an out dated version of the api or something?"
Replies:
"It could be, that is the thing when we roll out new Operating systems, some issues arise with other providers that may not have complete compatibility with our new software."
"That does sound like it on that provider if it works in some places. I apologize i was assuming it was every use."I would actually see if this clears up within the next 2-3 months. Like I said it is a compatibility issue, other providers have to catch up to the update."
"I am pretty sure that more providers will update their software to enhance this feature."
"If it is a certain card you could contact that provider, but the issue here more than likely falls with the merchant not having up to date software, which is triggering the security feature."
I've contacted one of the apps support teams where I'm getting the issue and will see what they say.