I also use Paypal to process card payments, and they charge me £20 pcm +3% of the transaction whether credit or debit card used.
That is a lot. You should not be paying over 2% for any CC transaction. The charges from both HBOS (a truly crappy bank though, nowadays) and HSBC are 1.5% to 2%, with the figure depending on whether it is a company issued CC or a private one.
Whilst expensive it does save the occasional bounced cheque and the hassle of paying in cash at the bank.
True, but CC payments are easy enough to revoke if somebody wants to scam you. Paypal is a crooked organisation (though very useful for paying for small items on mail order) which makes life particularly easy for customers who are scammers (do a google).
The only form of "cleared funds" is cash
Even a bank transfer ("cleared funds" when you get it) can be reversed out later, if the money is the proceeds of fraud, etc. That's why I would not accept even a bank transfer from what is obviously a Nigerian scammer... not that any of them would do a BT anyway; they use CCs, mainly.