I was under the understanding that they cared only about their image and the fact that their service was being used to purchase those items. If that's the case, then they shouldn't have an Issue with it existing in the first place, just that people can associate their platform with those type of games. If Steam went out of their way to make it so you can't use third party(or even second party tbh) merchants with adult-only and NSFW style games, then consumers wouldn't be able to relate their service to those type of games.

If what you said is correct there, that's a massive overstep on the payment processors, but I don't think that's the case here.

For example, when visa stopped accepting advertisements on Pornhub, it was because it wasn't able to control whether or not it was being depicted next to CP, which is against its rules. They entire quote was as follows: "It is illegal, and Visa does not permit the use of our network for illegal activity. Our rules explicitly and unequivocally prohibit the use of our products to pay for content that depicts nonconsensual sexual behavior or child sexual abuse.”

If this is the same case, just disabling the payment processor's ability should more than suffice.

Having said my main concern about all this is, currently steam is rolling over, but as people have said previously, steam is a large company. They could just decide full stop that you can only pay for video games with a steam wallet, which will make it so you have to add the funds to your wallet ahead of time. This also will remove quite a bit of protections that consumers have when using a credit card because at that point the service is Steam providing you money for your wallet instead of Steam providing you a functional game which means that any type of argument consumers would do with chargebacks of like this game isn't functioning on my system would be immediately thrown out because steam only charged you to add funds to your wallet instead of buying a game like it currently is.

a few ways to be honest.

They already have steam wallet cards at most electronic retail stores which operate the same as gift cards

but I was thinking more along the line of the payment processor is still there, but the goods being purchased is no longer the game itself, just adding currency on, which more-or-less removes the problem all together. Payment processors are no longer being used to buy NSFW content, its being used to purchase wallet funds. So the association is no longer valid.

Alternatively they could go the Mullvad approach as well, and allow for cash, check and wire transfer over if they really wanted to. Heck honestly like what PC said, with how big they are, they could even make a low transaction fee(seller side) savings card and could probably rival the companies themselves. I know a few people that would happily switch to said card if it meant ease of access buying games.

Additionally, a mix of these could be done, at some point card companies would fold because its threatening their bottom line. I personally think if they went the steam wallet route, the companies wouldn't want to engage big stores such as walmart, as a good portion of their revenue is via the transaction fees those companies provide.

this is all hypotheticals though