I am planning to sell (I am not even LLC yet), non-physical digital goods for $1 to $2.99. Of course I am hopping for high volumes. So is Paypal my only option.

Are there any merchant account or pp3 or gateways that specialize in micropayments?

Thank you

I think paypal best for you .I don't think you can find 3PP beat paypal.

real merchant account will work but it will not cheap , becuse you need to pay setup Fees, gateway Fees .....