this certificate was signed by an unknown authority

SOLVED!

The problem was missing apple WWDR intermediate certificate.

We must also install the WWDR intermediate certificate issued by Apple’s worldwide developer relations. It can be downloaded from the portal or directly at http://developer.apple.com/certificationauthority/AppleWWDRCA.cerMake sure you add this to your keychain as well.

To add the certificate: open your keychain utility software on your Mac computer, then go to File→Import items, then select AppleWWDRCA.cer.

I commented on the accepted answer but figured I'd give a more thorough response.

Generating a Merchant ID certificate for Apple Pay yielded the warning of "This certificate was signed by an unknown authority" on the resulting cert.

Typically the "Issued by" shows "Apple Worldwide Developer Relations Certification Authority" -- however, in the case of the merchant ID cert, it was:

"Apple Worldwide Developer Relations CA - G2"

Most answers online point to the AppleWWDRCA.cer, however this didn't work because of the issuing authority -- in this case I needed AppleWWDRCAG2.cer. I was able to get this cert from here: http://www.apple.com/certificateauthority/

I guess when you created/generated certificates the keychain preference does not have below configurations.Please check attached screenshot.I think after making certificates tab of preference according to attached image it will solve your problem.

Best of luck