If you process a large number of small transactions, you may be interested to learn about PayPal's micropayment processing. This seems to be one of the biggest PayPal secrets unearthed to date! PayPal introduced micropayments in August, 2005, although this feature wasn't available worldwide until late in 2008. The rate for US to US micropayments is 5% + $.05 per transaction; fees for cross-border payments are available in a link on this page.
The regular US to US processing fee charged by PayPal is 2.9% + $.30 per transaction, which means that payments below $12.00 will be less expensive to process with the micropayment plan. The only "gotcha" is that you'll need to set up a separate PayPal account in order to receive micropayments. This is because each PayPal account is associated with one processing rate.
According to a recent article in Business Week, PayPal may be considering allowing merchants to accumulate micropayments until they reach a certain amount and then release the funds to the merchant, charging just a single processing fee!
You can use this link to sign up for an account to accept PayPal micropayments.