The second one you’re referring to is called “Apple Card” in the US; I’ve never heard anyone (or Apple) refer to it as “Apple Pay,” except in the sense when using Apple Pay with an Apple Card.
Apple Card was/is Apple's way to promote contactless EMV in the US, which in turn promotes use of Apple Pay on the phone/watch.
Apple Card is a US only thing though AFAIK.
Apple Card, with fewer than 7mm users, was launched half a decade after Apple Pay [1][2]. Apple sells over 200mm iPhones a year here. Apple Card was not a way to promote contactless payment, it's a margin play.
Its sole purpose is to be swiped. It's well made, but I don't think they want people using it.