iPhone 17 Pro unable to set up apple pay

I applied for an apple card through Chrome browser and got approved. I bought an iPad and an iPhone 17 Pro and when I set up the devices it NEVER prompted for apple pay setup.

When i tried to set it up manually through Settings -> Wallet & Apple Pay

It says "Could Not Set Up Apple Pay" An error occurred while setting up Apple Pay

Since these were new devices, i signed out and used another apple account on the same iPhone device and I could see that the device startup AI assistant prompting for the Apple Pay set up and also when i tried to access the same manually through Settings -> Wallet & Apple Pay IT WORKED.

Now when I again reset my device and used my account, the problem resurfaced.

Note: I am using the same email ID for both Apple Account and Apple Credit Card

I dont know what exactly the issue is. I got into a call twice with Apple support and we did all diagnostics and it all looks good. I am on the latest iOS version 18.7 and i have the language and Region as United Status / English and the timeZone is set correctly.

Right now I am stuck