Unable to use Amazonpay gift card balance
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Now, I have also signed up and provided my pan details in apay ..but still I am unable to use that apay balance on any order or recharge.
How to solve this?
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Used to happen earlier too sometimes.
They restricted some from combining payment methods, APAY and netbankin/cards.
Yeah, I thought some rules might have changed...when I go to payment page .it doesn't let me select "amazon pay balance" option..it's greyed out,just showing balance only..that I thought is weird
As per recent updates in app, Amazon pay payment option is greyed out if your cart amount is greater than your Apay balance, as simple as that.
Solution: Try with a smaller cart value or increase your Apay balance.
I agree with OP.
Same has happened with my secondary Amazon account which hasn't been used since 7-8 months.
Now I'm not able to use Amazon gift card balance even during mobile recharge or shopping. Balance shows in non-selected grey area during checkout.
Please suggest a possible solution 
Paying partially using Apay balance is now not supported in the app. Some dimers suggested website option, which I haven't tried yet so cannot comment. Try out the solution given by quantum above.
Just purchase similar/exact amount of gift card which is needed for ordering that product..
E g. You have 200 in pay balance (GC+C). cost of product is 600.. you need 400.. so, purchase 400 Agv and then add in that account.. now, place order.. btw your issue is from long time..
No KYC required to use Apay gc balance . Probably some error in app. Try desktop mode or desktop.