In addition to the minor surcharge, there is the (opportunity) cost of Apple's hardware, the costs to vendors of supporting (yet) another platform, the consumer provides value to Apple in the form of consumer information, the consumer now has their fingerprint tied to payments, and then there is everything that goes along with the terms and conditions. Regarding the security, I'm not sure what the details are, but it seems that the attack surface is increased substantially. I'd personally prefer to have Visa, AmEx, etc reviewing and resolving fraud and other claims, seeing as how they've been doing it for decades and their bottom line depends on it, whereas Apple is relatively new to the game and Apple's bottom line does not depend on it.
Apple Pay might be awesome. Idk. But it's not "just a nice frontend for Visa, AmEx, etc., with better security".