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Did pp change policies? I just looked andthis is listed in policy

ayPal requires pre-approval to accept payments for certain services as detailed in the chart below.
Mature Audience Content
Any adult content delivered digitally including video on demand (VOD) and web-cam activities. PayPal may be restricted from processing payments in certain jurisdictions for adult DVD’s, magazines and other adult themed products or services.


you can stream real porn and get payment wit hpaypal.  But you need approval of pp. Or how do all those adult devs having a patreon get money? patreon collects money with paypal too. Of course, if you live in one of them unfree countries that try tomeddle in payments for stuff that is legal elsewhere, you have it tough.

Makes you wonder how big player like Steam does it.  I know of smaller player, nutaku, with paid adult games, they do use credit cards directly.  Or at least not  with stripe.   They use   probiller and yes, that processor does do work for some hardcore porn sites as well. At least that is the user side of the coin. I do not know how payout to    devs is handled. But I have seen games on nutaku that are on itch as well.

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Steam has its own payment processor. 
Also, paypal is allowing to buy sex stuff, it just doesn't allow the sale ( unless they have changed that as I have seen above ). 
Nutaku pays directly to your bank account, not Paypal or anything else ( again, as far as I know, I set up my account with them years ago ). 

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Note: If one can use PayPal to purchase "sex stuff", others must logically be able to sell that same "sex stuff"; otherwise, where is the money going?

I have used PayPal to make purchases on websites that provide adult materials.

Nope, not really. 
PayPal has its own logic, most times. 
They allow you to buy, but, they don't allow you to sell. And that is most likely because of "frauds" involving adult content and because they don't want to bother with that. 

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Again - every PayPal transaction has both a buyer and a seller. So, if people can buy something with PayPal, someone else is selling that thing.

If no one was allowed to sell such things via PayPal, then there would be nothing for anyone to buy, so in effect buying such things would not be possible either.

If you mean PayPal might shut down a seller's account due to violation of terms or too many chargebacks and such, but would not shut down the accounts of the people making the purchases? I imagine that's correct.