Hi Karen,
I have to say I agree with your comments on paypal, and although I haven't been bitten myself, a very good friend has twice, so its fair to say they are not my favourite company...
however...
I really do not like the idea of lots of different companies having my financial details floating about the ether, and as I do need to buy things from time to time from places like ebay and other small online software companies, paypal offers a common accepted payment method.
I like the idea of having a "Lite" version and understand that your seeing if the idea has wings, however its important to consider that the masses will use paypal, and a large portion of the masses "couldn't be arsed" registering with "yet another payment service" on top of the ones who, like me don't like the idea of a company thay have never heard of having their financial details.
The only way arround this is to use something like world pay where credit cards can be accepted directly in a one of payment transaction, but these services tend to be even more expensive for the seller.
There is a balance between reducing your costs and reducing your customer base.
