Apple has now added the ability to pay with Apple Pay to a number of their services, you can now use their mobile payment system to pay for iTunes purchases and more.
As well as iTunes you can also make purchases from the iTunes Store and pay for subscriptions to Apple Music and also iCloud storage.
This can be done by going to View Apple ID on your iPhone and then clicking Manage Payments, you can then add a Payment Method and link Apple Pay to your account. You can also link Apple Pay Cash to you account to use your balance as a payment method.
According to MacRumors the feature is not available in all countries as yet, it is available in the US and also headed to more countries soon.
Source MacRumors