Side button not double clicking on Apple Watch.

Does the side button single-click? If so, is there an issue with the setup of Apple Pay with your Watch?

Restart. Restart your Apple Watch - Apple Support

Unpair and re-pair the Watch, and try again:

… Unpair and erase your Apple Watch - Apple Support

… Set up your Apple Watch - Apple Support

Failing all that, and if Apple Pay is set up, use the Get Support link in the upper right, and discuss your options and alternatives with Apple.

Are you sure you are using the side button and not the Digital Crown?