It sounds to me like that phrase is there specifically to let them out of liability if someone gets busted under one of the many anti-fortunetelling statutes. Running a payment processor can open the door to all sorts of situations where someone could accuse you of profiting from the proceeds of crime. So they take an understandably proactive stance on making sure that there is no possibility that someone could mistake them for a deep-pocket for liability purposes. This way if, someone is caught using Square to charge for remarkably effective curses, the grieving relatives won't be able to sue Square for being party to the transaction.
They have a FAQ here which includes a list of items which they won't accept. It doesn't mention anything at all about occult materials, but it's quite possible they've recently decided to include it under the heading "Businesses that present a high risk of charge-back"
Well, that's weird. It certainly doesn't seem to be boilerplate, since the first google hit for "credit card occult materials" is this thread right here (which right now has no comments anyway) and the rest are all offering to sell you occult materials using your credit card.
It would be interesting to get to the bottom of this. (I used my ouija board to ask the spirits, and they said BKMEWERARGAOK, which isn't much use.)
It's doesn't seem to be that common, but not it's not unheard of either. For example, Amazon Payments prohibits "occult materials", and according to an old Boing Boing article, Google Checkout used to prohibit "occult goods" as well.
The only definition found in the Black's Law Dictionary is for occult marriage, which is when only the two parties of the wedding know. I think the legal definition of occult could very well be within the bounds of hidden (which makes sense in the context) versus magical (which really doesn't makes sense in the context).
Not sure why the original comment is getting downvoted, I am tending to agree with him...