Why is my Apple Pay restricted?

I think you may mean Apple Cash. For that read the information provided here.

If your Apple Cash account is restricted or locked - Apple Support

Your Apple is not restricted. You’re confusing Apple Pay with Apple Cash. Two entirely different services.

You may be in the process of being de-banked. De-banking, more commonly spelled debanking, also known within the banking industry as de-risking, is the closure of people's or organizations' bank accounts by banks that perceive the account holders to pose a financial, legal, regulatory, or reputational risk to the bank.

https://applecash.greendot.com/termsconditions/