The squeeze on any content that religious people find 'yucky' is double-pronged in the US - encouraged both by governments and businesses. Paypal, Visa, Mastercard et al are given complete discretion over what transactions they can block, and they have already extensively used this to deprive legal NSFW platforms and creators of their income.
So, on one end, state governments are trying to strongarm NSFW services by imposing draconian requirements that ask users to submit their private data to some random opaque 'benevolent' third party business - and on the other, payment processors are using their legal right to refuse whatever transaction for any reason so they can starve them of income.
I dont think the pressure from payment processors is because of puritanism, but rather payments in this space tend to come with a much higher % of fraud and chargebacks and they've decided it's not worth the risk.
"risk management" is not puritanism - sex work has a different/higher risk profile for PSPs (fraud, chargebacks, etc) and it's easier to say "no" than to come up with a new product to serve customers.
An enterprising PM at a PSP or fintech could look at the size of the sex industry, measure the risk of providing payment/banking services to sex workers and businesses and offer them at a premium like any other "niche" financial area.
And while we're on the topic of "draconian" regulations from the government - it's not outside their interest to limit the availability of obscene content from children. This isn't a "think of the children" argument so much as "children consume graphic pornography at huge rates and porn providers make money off them as consumers and producers with such inept guardrails that age verification has been a meme for 25 years." I don't think validating your identity with a government ID (and storing it forever) is a good countermeasure but I disagree its some kind of draconian limitation on free speech. If porn sites didn't buy and sell sex from kids and self regulated, this wouldn't be necessary (nb4 "it's the parent's problem" - good luck!)
I know this is late and likely won't be read, but I have a few objections to what you said.
First of all, not all NSFW transactions are created equal. A person subscribing to a website, a person buying a physical product, and a person paying an artist to draw what they want all have different risk profiles. (The former is far more likely to cancel). Does this change the opinion of Paypal, Visa, Mastercard et al? No, they blanket ban everything. They pressure businesses and platforms to stop selling this content and to cut out any of their NSFW creators, and the websites often have no other option. These big companies are the only available avenue for sending and receiving money.
Second of all... I think that being free to do legal transactions with whoever you want in exchange for anything you want should absolutely crush the payment processors' right to moderate their transactions in accordance to their own guidelines, rather than the law. Again, you have almost nowhere to run if these businesses turn you down - there is no digital cash. I think that companies that process transactions should be mandated to not discriminate between them, as long as it is lawful.
Lastly... The reason why this verification debate has been standing for 25 years is because it's not solvable. Every proposed scheme for reliable age verification that I've heard of either trades off your privacy, or isn't watertight (and might as well not be there). You can only have one. Given that private companies and governments love private data, and that we've had open internet for 30+ years now and nothing catastrophic has happened so far, I say we should let it be.
That's exactly a "think of the children" argument. CSAM moderation was always fairly strict on the big sites -- they knew it was both an existential threat and the route through which puritans such as "duped" here (nice name) would try to attack -- but they really tightened up with the ban on third party content. Now they have a chain of responsibility for every video. So, "duped," if you actually have an example of the problem you claim is rampant, why aren't you acting on it? Why aren't you lighting the fuse on that chain of responsibility? Do you want to promote the abuse of children? Or do you admit to making it up so that you could use it as a pretext for your agenda?
Also: yes, building a government blackmail database is draconian.
So, on one end, state governments are trying to strongarm NSFW services by imposing draconian requirements that ask users to submit their private data to some random opaque 'benevolent' third party business - and on the other, payment processors are using their legal right to refuse whatever transaction for any reason so they can starve them of income.