UPDATE.
Spent two hours on the phone with HSBC Apple Pay services last night. The guy who I was talking to said he had two screens open. HSBC systems WHERE authorising the card as OK to be provisioned for Apple Pay, however the second screen (no idea what he was connected to, and he didn't elaborate on it), the request was never received.
The reason being is that the reply from BACS was saying this was a US based card, and the response was OK to be provisioned for US Dollar, not UK Sterling, hence the failure.
We spent most of the time trying to determine if I could force the phone to set location base in the UK. Location based services was on, and all options were set to UK, indeed maps indicated my correct location in the UK. I subsequently checked by ITunes account/services are UK based. So although HSBC Apple Pay services seem to think there IS an option in the 5S Watch OS 8.4.1 to force location to be either UK or US, I could so NO such option.
They suggest I contact Apple tech services to ask if such an option is available to force the phone to be UK based.
I think this is a "cop out", as location based services, if on, should indeed/and does show I am in the UK not US. Also I notice the location based services icon on when trying to provision the card, but it does go "off" during the last few seconds, around 3 to 4 secs, before the card is declined.
To my mind it's either HSBC/BACS systems that are not talking correctly to say that I am UK based, and nothing to do with Apple Pay services.
The first contact to HSBC Apple Pay support last night suggested waiting for the next Phone OS version to come out before re-trying.. I was flabbergasted at that suggestion. It's working for some, so that's a "cop out" as well.
Result. I've spent as much time as am willing to try and help HSBC Apple Pay services to get to the bottom of this. I shall be cancelling my card tonight. Their loss, and one more pissed off customer.