Update: Samsung has fixed the issue with Samsung Pay on the Galaxy Watch 4 series in India after the One UI 5 Watch update. The feature is now working as intended.
Earlier today, Samsung released the One UI 5 Watch update to the Galaxy Watch 4 and the Galaxy Watch 4 Classic. Apart from Wear OS 4, the update finally brings Samsung Pay to the smartwatches, which lets users pay using the Tap To Pay functionality via NFC. However, there appears to be a big issue with the new feature.
After updating the Galaxy Watch 4 or the Galaxy Watch 4 Classic to One UI 5 Watch, the smartwatch prompts you to install the Samsung Pay app. After installing it, you can see it in the app drawer on the smartwatch. Once you tap it and go through the introduction and tips, it asks you to continue the process on the phone. When you check it on the phone, the paired smartphone asks you to update your smartwatch to the latest software version.
However, the problem is that your smartwatch is already updated to the latest version of One UI Watch. So, the phone keeps you locked into an update loop of sorts. It keeps nudging you to update the watch to the latest software and doesn't let you use Samsung Pay.
The problem could be related to the branding of Samsung's mobile payment service. Earlier this year, Samsung rebranded Samsung Pay to Samsung Wallet with an update. However, the Galaxy Watch running One UI 5 Watch keeps looking for Samsung Pay rather than Samsung Wallet. Maybe Samsung will offer an update to update Samsung Pay to Samsung Wallet in the coming days to fix the issue.