I'm setting up a new internet service which will require a lot of small transactions from users. I'd like to accept credit cards.. what's the best way to go about this? Are there premiums involved?
Alternately, does anybody have any experience using a Paypal/Google Checkout combination?
Long answer: See the following discussions
http://news.ycombinator.com/item?id=470128
http://news.ycombinator.com/item?id=389692
http://news.ycombinator.com/item?id=115723
http://news.ycombinator.com/item?id=12010
Also, if you store your customers' credit card information, you have to do implement all sorts of access & privacy controls, a ritual otherwise known as PCI compliance. You probably don't want to go through all that trouble.
Either way many sites typically support multiple payment methods. But if you're talking about small transaction sizes you may want to do some research into micro payment processors. Not sure how far along they are but one that had been mentioned a long long time ago was NOCA. Think the site is NOCA.com. But there are others.
Good luck.
oh and yes there are always premiums involved. If you go with PP the fee for payments pro is like $20/mo + ~3% + $.30/transaction. Services like Authorize.net and Cybersource will have slightly lower transactional rates but higher monthly fees.