..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.