It's not a location thing . . it's a per-banking app thing. And specifically it's a "does your banking app use Google Play integrity API" thing. On LineageOS running on my FairPhone 3 . . my banking apps all worked . . . until the day they didn't. Here is a table reporting the current state of banking app comparability around the world . . but the next update from any specific bank could (and in my case did) break it -
PS. In the UK I did actually find an alternative to Google Wallet. . . Curve Pay. Not open source, but not dependent on Play Services. And enabled tap and pay on LineageOS.