This is worse than PayPal for sellers with products over $5 (after shipping, tax). I wish they could've come up with better pricing. I would think most shops would be selling things over the $5 mark, but I can't say for sure.
It's nearly impossible since their processing fees on some card types will be over 3%. They're already taking a loss on those transactions; most will be under 3% to balance it out, but not enough that they could offer better pricing than everyone else.
They're not going to be able to negotiate barely-above-interchange rates like PayPal probably gets from its banks with billions of transactions in monthly volume. Visa's interchange fee to the bank is still as high as 2.7% on some cards, which is the floor upon which the processor can set its markup to the merchant like Etsy.