This issue came to light with users on the Android Wear subreddit noting that Google had disabled the Android Pay app in non-US or UK regions. While some users were able to enable it manually by searching for the app in the Play Store, the app would disable itself automatically in a matter of hours, making the effort wasted.
A Reddit user noted that Google's response to this was to observe that Android Pear for Wear had not launched outside the US and UK. This is correct but does not cover the whole story. Android Pay has been launched outside the UK and US and in fact, operates in 15 other countries. In addition to that, Huawei Watch 2 users were able to make use of Android Wear on the Watch 2 prior to the Oreo update.
The thing is, Google does support Android Pay on Android Wear since the Wear 2.0 update but treats it as different when it comes to availability on the watch. While Huawei had a workaround for this with Nougat, the Oreo update disables this with no immediate recourse. The only solution it seems, is to get affected Android wear users to wait for Google to roll out support for Android Pay for Android Wear worldwide themselves. With the Android Wear platform in a precarious position as it stands, it might be prudent not to hold one's breath,
Via Android Police