Merchant not registered for domain error after successful Register Merchant API call

We have recently enrolled to the platform integrator program in order to be able to use this API https://developer.apple.com/documentation/applepaywebmerchantregistrationapi to verify our customers' domains for apple pay.

We have distributed certifications and the domain association file and have successfully conducted the domain verification call. Consequently, the domain is registered for a given merchant. However, when conducting a payment session request, we receive an error response saying that the domain is not registered.

Specific example:

We POST to https://apple-pay-gateway.apple.com/paymentservices/registerMerchant

with body:

{
    "domainNames": [
        "example.com"
    ],
    "encryptTo": "platformintegrator.com.example",
    "partnerInternalMerchantIdentifier": "example",
    "partnerMerchantName": "example"
}

and get a 200 response. The apple server successfully conducts the call to the example.com/.well-known/apple-developer-merchantid-domain-association resource.

Then the GET request to https://apple-pay-gateway.apple.com/paymentservices/merchant/example

lists the domain for this merchant:

Response

{
    "domainNames": [
        "example.com"
    ],
    "partnerMerchantName": "example",
    "partnerInternalMerchantIdentifier": "example",
    "partnerMerchantValidationURI": "/.well-known/apple-developer-merchantid-domain-association",
    "encryptTo": "<hashed merchant id>",
    "delegatedCommerce": {
        "enabled": true
    }
}

However, when trying to initiate an apple pay payment session here:

POST https://apple-pay-gateway.apple.com/paymentservices/paymentSession

Body:

{
    "merchantIdentifier": "platformintegrator.com.example",
    "displayName": "example",
    "initiative": "web",
    "initiativeContext": "example.com"
}

we receive this error response:

{
    "statusMessage": "Payment Services Exception merchantId=<hashed merchant id> not registered for domain=example.com",
    "statusCode": "400"
}

Our assumption is that after registering a domain for a merchant the apple pay process should work.

We already have a working apple pay implementation with the traditional domain verification process with merchant IDs.

We would like to know if we are missing any detail or what is causing this error in our payment process.