How Do Pay Phones Work?

By Laura Stuart

What is a Pay Phone?

Pay phones are telephones located through well-traveled areas usually in cities or at gas stations. These telephones are available to the public for a fee. Inserting coins, a credit card, telephone card or other form of payment, activates the phone for use. Pay phones are generally located at gas stations, high-traffic sidewalk areas, interstate exits, train stations, metros, public buildings and other locations. Increased use of cell phones has threatened to make the use of pay phones obsolete. However, sometimes callers still need them in emergency situations.Pay phones are also prone to vandalism and damage due to their availability to the public.

How Pay Phones Work

Pay phones, or coin phones, are activated by the weight of the coin as it is inserted. The coin activates a pulse, and the pulse starts the dial tone of the phone. Each pay phone is programed with calling rates and fees. An electronic device monitoring the current rates for local and long-distance calling is installed in the payphone while it is being made. This device also contains information about calling cards and collect call data. When the dialer attempts to make a call, the phone will calculate the amount of money needed for the call based on the length of time the dialer wants to talk. As the time ends, a voice will request additional money to be deposited to continue the call. If money is not deposited, the phone will automatically disconnect the call when the deposited money runs out.

Pay Phone Availability and FCC Charges

Pay phones have seen significant deregulation from the U.S. Federal Communications Commission since their inception. Pay phones are sometimes referred to as COCOTs (customer-owned, coin-operated telephones) can be owned by anyone. A 49.4 cent charge is imposed by the FCC on pay phone calls placed to toll-free numbers. Because of this, some payphones will reject calls to toll-free numbers to avoid the charge. Dialers using calling cards that have to pass through a toll-free number will often have the charge returned to them and deducted from the amount of the card.