Chargebacks are a huge problem for "adult" online transactions. People buy a porn site subscription, then change their minds later. Especially when the wife sees the charge on the monthly credit card bill. They claim fraud and get their money back.

Also, the porn industry is the one used by con artists. Often the Russian mafia. They set up a site, sell yearly subscriptions, then take off with the money after a few weeks or months. The customers get irate when they try to go to the site and get a 404, or when the site is not updated for months. They demand their money back, and it's the credit card companies that take the hit. (That's why MC and Visa cannot be used to buy annual PC memberships from DAZ.)

Visa and MC will deal with porn sites and sites that sell (non-porn) yearly subscriptions, but it costs a lot more. You have to jump through a lot of hoops and put up a big security deposit first. Can't blame them for wanting to protect themselves, but it's a pain for legitimate businesses. And PayPal's method of screening out the fraudsters is a bit heavy-handed. No nudity at all, not even nekkid mesh. But unlike MC and Visa, all their business is high-risk online transactions, so perhaps they have to take a harder line.