It seems someone loses either way. Charge a flat fee and small transactions are more expensive. Charge a percentage and large transactions are more expensive. I suppose you could do some combination of both, but that would make the pricing more complicated to understand.
I don't know about everyone else, but I would care if I was being charged X% to sell a $200 item -- even more so if there were options to pay a flat fee.
There's a reason why every other payment processor I can name and probably hundreds I can't name charge a percentage - it strikes a balance between fairness for large and small payments. Almost no company I can think of would blink at a 0.25% fee - a sign your fees are too low. Meanwhile, nobody would want to pay 80% of a $1 purchase in fees. I really encourage you to rethink your fee model. Visa, Stripe, Mastercard, etc. all use a percentage. There's a reason why almost every payment fee in the last 50 years has used a percentage - because it works.
Personally, I just discovered Gumroad and I'll probably be using that instead. With them I pay 10% of a $5 transaction in fees. With Snappy I pay 20%. It's a no-brainer.
Finally, I don't think a flat fee plus a percent is too hard to understand. Stripe and Gumroad use it, and probably many more but I can't think of them.
[edit] I just found out I can't use recurring subscriptions with PayPal. I'm going with Gumroad. That said, you have a really nice looking product and I'd love to use it, but 20% in fees is ridiculous.
Every other payment processor charges a percentage -- agreed. So, it seems people have no choice right now. They are going to pay a percentage no matter where they go.
I'm open to pricing suggestions. I was just trying to do what I thought was reasonable.
If you (or anyone else) want to work out some kind of X% for less expensive transactions, then send me an email and we can work something out. I'm willing to discuss matching whatever Gumroad or anyone offering similar checkout products is charging.
I don't know about everyone else, but I would care if I was being charged X% to sell a $200 item -- even more so if there were options to pay a flat fee.