ApplePay - 417 Payment Services Exception merchantId=*** not registered for service

I'm getting 417 error when calling https://apple-pay-gateway.apple.com/paymentservices/startSession with body:

{
    "merchantIdentifier": "merchant.com.***",
    "displayName": "***",
    "initiative": "web",
    "initiativeContext": "***"
}

The response I get:

{
    "statusMessage": "Payment Services Exception merchantId=2B4D7F37BB3374A2C6B9F28C1042C408F9727EFE09C21EE71297302EBC830DF0 not registered for service",
    "statusCode": "417"
}

Strange thing is with the same setup approximately 1% of calls returned the correct session, but most of the time api responds with 417. I've already tried to remove whole merchant identntifier and created new with all the new certs and domain registration - didn't help, now I get 417 for all requests. Any ideas? I could not find any information on apple docs what this error actually means.

Config below: