If you make it a felony to pay ransoms (which I strongly support), there will be far fewer ransom demands. Yes, some of it will go underground, but in my view it’s the only way to actually decrease the demand side of the equation.
A company currently performs a simple mathematical equation when deciding to pay a ransom. Does the reputational and financial cost of not paying the ransom outweigh the price of the ransom? In a world where ransom payments were illegal, then those same companies would also have to include the legal penalties and probability of being caught as part of that equation.
Obviously, some companies would still see a net benefit in paying the ransom, but fewer would, so less ransoms would be paid.
It seems to me like you're trying to use 'war on drugs' logic on ransoms. The key difference is that companies don't want to pay ransoms, but do so out of necessity.
It’s like prostitution, if it’s illegal you find that most sex workers are the most vulnerable in society. When it’s not, sex workers can be anyone who doesn’t want to drive 6 hours for Uber on the weekend for extra cash.