How Does a Pay Phone Work?

Introduction

Pay phones are really not that much different than other phones. In fact, you could buy a pay phone and put it in your house if you really wanted to, since pay phones run on regular telephone lines. The only difference is you have to pay to use them. So when you see a pay phone at your local gas station, the grocery store or the local mall, it's there for one reason--to make money.

Why Are Pay Phones So Expensive?

Pay phones don't cost any more to call from than regular phones. Both local calling and long distance rates are the same as they are in your house. But the owner of the pay phone can dictate the preset charges for certain calls. As an example, let's say you want to make a long distance call from the local gas station. While that call is only costing the gas station 10 cents a minute, the gas station-owned phone is preset to charge you 50 cents a minute. That means that they make 40 cents profit for every minute your on the phone.

Can Anyone Own A Pay Phone?

The answer is yes. If you wanted to put a pay phone in your house and charge your friends and family to make phone calls, you could. In fact, you can even get pay phones with card readers so you can make money not only on coin deposits but also on credit cards and phone cards.

Resources

• An all-inclusive site for those interested in pay phones