It's the credit card companies.

Showing users nudity for free is fine. Making them pay for it means you're selling porn and the payment processors ban you.

Reddit wants to make users pay for viewing content. They can't get away with that if the content is NSFW.

Reddits income is via ads, not cc payments

This is the advertisers

This is about the API, which is no longer free. They are specifically blocking NSFW content from the paid API (and, by extension, from anything that uses it) so that they can charge money for it.

given the prices they were quoting for API usage, they’re not taking payment through a credit card

Why do processors care? Why does it matter if the domain is pornhub.com or reddit.com?

Most notably higher chargeback rates

..which leads to fines from visa/mc/etc, and putting you to "watchlist". And those fines are pretty expensive. Very few companies in CC processing market would like to risk their business for some adult processing. Easier and safer to just drop it completely.

Why are chargebacks higher?

Why can't that just be accounted for in the processor's rates?

>Why are chargebacks higher?

People pretend their purchases are fraud or regret their purchase later so they chargeback more frequently than other services.

>Why can't that just be accounted for in the processor's rates?

Because it's easier as a credit card processor to just drop all of your high risk clients and focus on serving the rest of your customers as best as you can. Of course that leaves a whole in the market for other credit card processors that charge more for allowing higher risk purchasing.

RedReader still appears to?

They want advertisers. That’s their business model.

Advertisers don’t want to be associated with that. No dead babies. No watch people die. No horrific injuries. No sex. No weird/freaky/strange/whatever sex.

They want to advertise next to unobjectionable content so they can’t be drawn into stuff or have their reputation tarnished by accident.