> the reality is that adult oriented businesses deal with massively higher rates of fraud and charge-backs

This gets repeated, but it's not the real reason. If it were, Visa/MasterCard would be fine with a store like Steam offering those games as e.g. crypto-only purchases.

Found an explanation: the reputational risk they're talking about is 2022 pornhub case. Most likely some saudi dude didn't like it and threatened to pull. That's why they don't talk about it: because it's literal sharia exported around the world.