Looking into this further, although I'm not sure about this, it seems like perhaps the settings in Google Play to require verification with purchases, only applies to purchases made within the Google Play app itself.
But, again I'm speculating, it seems like if you are logged into your Google account (because you're using Google Play Services) then apps installed on your phone can use Google Pay without requiring verification. This seems like basically a way to get around the verification required in Google Play itself. So, I guess, the only security is the fact that your phone has to be unlocked (but you are not protected if you're letting a friend or child use your phone).
I looked in the Google Wallet and general Google account settings online and there also appears to be no way there to control this.
I guess I could just log out of my Google Account? I would then have to log back in to install new apps from Google Play (which I don't do very often). But would already installed apps from Google Play update if I do that? Generally Google Play seems to be non-functional if you are not logged into an account.