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Do you know if this is being used in iOS Safari for Touch ID in the browser too? Or is that something non-standard?

Apple Pay on the web exists and it's fantastic. As Tarek points out it is custom and doesn't use this standard.

Apple has not implemented the starndard yet, the WebKit Status page lists it as "Under Consideration".

I hope they end up implementing it for the sites hat won't do Apple Pay natively.

That's the non-standard Apple Pay JavaScript API [1].