Pay for iCloud with Apple Pay

Solution 1:

The real answer is because Apple Pay stores the card info locally on your phone/watch. That's why when you get a new device, you need to re-sync and re-setup all your cards.

In contrast, iCloud subscription is billed directly from Apple's servers with whatever payment method they have on file. They don't have access to the card in your Apple Pay which is stored securely on your individual devices.

In the article about Comcast posted by oa- in the other answer, the actual thing Comcast is allowing users to do is to open their app and make a bill payment from the phone using the Apple Pay card stored on that phone. It still doesn't allow reoccurring automatic payments, because it can't.

Solution 2:

While it may seem natural to select Apple Pay as your payment method for iCloud, it is not possible to do so.

Apple Pay is meant to be a payment solution for single transactions.

iCloud storage upgrades are reoccurring payments and thus can not be used with Apple Pay.

There are some instances where Apple Pay can be used for reoccurring payments, but it has to be enabled explicitly by the seller. See https://9to5mac.com/2017/04/20/comcast-xfinity-apple-pay-bill-payments