Harry,

I don't think Paypal scares customers away. I think it attracts them. Security.

I think the lesser known brands scare more people away. And are less secure. And you get more chargebacks.

I don't know what this thing is against Paypal. I think it is the same phenomena as people hating Microsoft - it's just standard to hate the top dog.

Anyway, the best thing to do if you want to test your business idea is start with paypal. And then move onto another system if necessary (you'll probably find that it won't be necessary).

The only problem with paypal is that it doesn't include an easy-to-setup shopping cart. But I think it's just as easy to use their shopping cart setup as it is to go via the merchant account way.