A telephone card, calling card or phone card for short, is a small card, usually resembling a credit card, used to pay for telephone services. Such cards can either employ prepaid credit system or credit card style system of credit. The exact system for payment, and the way in which the card is used to place a telephone call, depend on the overall telecommunication system. Currently, the most common types of telephone cards involve pre-paid credit in which the card is purchased with a specific balance, from which the cost of calls made is deducted. Pre-paid phone cards are disposable. When the balance is exhausted you simply buy a new card. Cards purchased can often be refilled. The other main type of card involves a card with a special PIN printed on it that allows one to charge calls to a land-line telephone account.
There are principally two core technologies for phonecards: stored-value and remote memory.
The earliest system used a magnetic stripe as information carrier, similar to the technology of ATMs and key cards. It was issued in 1976 in Italy, manufactured by SIDA.
The next technology used optical storage. Optical phone cards get their name from visible marks left on the card, such as holes or lines, so that the card reader scans for such marks and determines the balance on the card. Optical cards, such as ones made by Landis+Gyr and Anritsu, were popular early phonecards in many countries. Such technology is quite simple and easily hackable, thus for security reasons, among others, optical phone cards have been steadily phased out around the world. Optical phonecards are still in use in several countries, perhaps most notably in Japan.
The third sub-system of stored value phone cards is chip cards, first launched on a large scale in 1986 in Germany by Deutsche Bundespost after three years of testing and in France by France Telecom. Many other countries followed suit, including Ireland in 1990 and the UK circa 1994-1995, which phased out the old green Landis & Gyr cards in favor of more colorful smart cards. The initial microchips were easy to hack, typically by scratching off the programming-voltage contact on the card, which rendered the phone unable to reduce the card's value after a call. But by the mid-to-late 1990s, highly secure technology aided the spread of chip phone cards worldwide.
Making a prepaid or calling card call requires the user to make two calls. Regardless of the type of card you must gain access to the calling card platform of the card company. There are several methods in which you can access the calling card platforms, Toll Free number, and larger companies offer international toll free as well, or what has become increasingly popular is access through a local number. The difference is that the toll free method costs more to the calling card company and it bears the cost of the first call and with a local number the caller bears the cost. The local calling method has become quite popular because it offers lower rates to callers. Why? The card company doesn't have to pay for all your attempts or your calls when you check your balance. The cost of access is paid by the caller and generally works out to be cheaper. If you travel though toll free service is more of a convenience and has its price generally 5-10 cents more expensive per minute.
Once you have been connected you are authenticated by a PIN, the most popular method or by the chip embedded on the card. Once you have been validated you are usually given you balance value left on the card before being offered to make you second call in the process. Once you have dialing for the second call you are generally give the amount of minutes left on the card based on the destination that you just dialed as reference as to how long you can speak. Many cards offer a warning when you have one minute left or if you have an account a recording to add more value to the card if you have a credit card on file.
Prepaid or calling cards can save money for consumers or provide convenience to frequent travelers who don’t have cell phones or want to avoid heavy cellular roaming charges.
The first public pre-paid remote memory phonecard was issued in the United States in December 1980 by Phone Line. As telecom industries around the world became deregulated, remote memory cards were issued in various countries. Remote memory phonecards can be used from any tone-mode phone and do not require special card readers. Since remote memory cards are more accessible and have lower costs, remote memory phone cards have proliferated. However, the utility of these cards are reduced due to the large number of digits that need to be entered during usage. To call a long distance number, the user first dials the local access number, then keys in the secret code, followed by the actual long distance number. Based on the long distance number entered, the time remaining on the card is announced, and the call is finally processed through.
Remote memory phonecards are in essence text; requiring an access number, a unique PIN and instructions. Therefore the instructions can be printed on virtually anything, or can be delivered via e-mail or the Internet. Currently many websites sell phonecards through e-mail.
Phonecards or calling cards are available in most countries in retail stores, retail chains and commonly corner stores. Generally, remote memory phonecards can be issued by many companies and come in countless varieties. They can focus on calling to certain countries or regions and have specific features such as rechargeability, pinless dial, speed dial and more. Phonecards may have connection fees, taxes and maintenance fees, all influencing the rates.
Some prepaid phone cards even offer convenient features like PINless Dialing, and can be recharged online manually or automatically via a method called auto-top-up, which brand name prepaid cellular companies like AT&T and Verizon Wireless offer. Additionally, some hybrid virtual phone cards even allow customers to view their call detail reports (CDRs) online through their calling account.
Pioneers in the virtual phone card niche have been blazing their online trails for nearly a decade, and can be credited for growing the niche into a now multi-billion dollar industry. This hyper-competitive industry includes large corporations like IDT, MCI, and AT&T, but smaller Dot Com pioneers within this niche, including SpeedyPin.com, STiphonecard.com, CallingCards.com, and Zaptel.com have been able to successfully compete by offering, in many cases, lower international rates (from the USA). The fierce competition has been great for customers because per minute rates have continued to decline, however, some merchants have seen their margins continue to decline as well.
The hobby is called "fusilately" in the UK and a collector is known as a "fusilatelist"; in the USA it is called "telegery". Phonecards have been collected worldwide since the mid 1970's and peaked in the mid 1990s. At its height, over 2 million people collected phonecards. There are many Web sites about this hobby where collectors can browse thousands of different cards from all over the world, each having some kind of personal story.
The hobby has been in decline (in some countries) due to the some telecom companies ceasing to supply phonecards.