A telephone card (also telecard, teleca, calling card or phone card for short) is a credit card-size plastic or paper card used to pay for telephone services (often international or long-distance calling). It is not necessary to have the physical card except with a stored-value system; knowledge of the access telephone number to dial and the PIN is sufficient. Standard cards which can be purchased and used without any sort of account facility give a fixed amount of credit and are discarded when used up; rechargeable cards can be topped up, or collect payment in arrears. The system for payment and the way in which the card is used to place a telephone call vary from card to card. Calling cards usually come equipped with PIN for user protection and security. Most companies require user to enter the PIN before granting access to the calling card's funds. PINs often are printed on a piece of paper found inside the calling card's packaging. Once the users makes their first call, some companies offer the option of eliminating the PIN altogether to speed up the calling process. Companies that sell virtual calling cards online typically send the PIN via email.
Stored-value phone cards A stored-value phone card stores the available credit balance in an analog or digital memory physically embedded in the card. This balance can be read by a public payphone when the card is inserted into the card reader. This is superficially similar to a bank automated teller machine, but a stored-value card is more closely analogous to a change purse. While ATMs (as well as the remote memory systems discussed below) use the card merely to identify the associated account and record changes in a central database, stored-value systems make a physical alteration to the card, or write data to an embedded chip or magnetic stripe to reflect the new balance after a call. Some magnetic cards also show the remaining value. Used primarily for payphones, stored-value systems avoid the time lag and expense of communication with a central database, which would have been technically complex before the 1990s. There are several ways in which the value can be encoded on the card: The earliest system used a magnetic stripe as information carrier, similar to the technology of ATMs and key cards, and the first magnetic strip phonecard, manufactured by SIDA, was issued in 1976 in Italy.
The next technology used optical storage. Optical phonecards get their name from optical structure embossed inside the cards. This optical structure is heated and destroyed after use of the units. Visible marks are left on the top of the cards, so that the user can see the balance of remaining units. Optical cards were produced by Landis+Gyr and Sodeco from Switzerland and were popular early phonecards in many countries with first optical phonecards successfully introduced in 1977 in Belgium. Such technology was very secure and not easily hackable but chip cards phased out the optical phone cards around the world and the last Landis+Gyr factory closed in May 2006 when optical phonecards were still in use in few countries like Austria, Israel and Egypt. The third system of stored-value phone cards are smart cards and use an embedded microchip. These were first launched on a large scale in 1986 in Germany by Deutsche Bundespost after three years of testing, and in France by France Télécom. 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 the chip (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 phonecards worldwide. By the 2010s, the rise in the use of mobile phones led to the withdrawal of phone cards by some operators, with BT in the UK withdrawing phone cards from sale in 2012.
Remote memory systems Making a remote memory prepaid or calling card call requires the user to make two calls. It is necessary to dial an access telephone number to connect to the calling card system. There are several methods. One is via a toll-free number, with larger companies offering this internationally. Access through a local number has become increasingly popular in recent years. Toll-free calls are paid for by the recipient (the calling card company), which passes on the cost through higher call charges; total cost of a call to the user is often lower using a local number. When travelling through several local areas a toll-free service may be preferable. Once connected to the access number, the account is identified by keying in a PIN (the most popular method) or by swiping a card with embedded chip or magnetic stripe. After validation the balance remaining on the card may be announced, and the desired number may be keyed in. The available minutes may be announced, and the call is connected. Many cards make a verbal announcement if credit is running out. Prepaid or calling cards are usually much cheaper than other telephone services, particularly for travelers who do not have easy access to other services. Hotel telephones can be very expensive, particularly for long-distance calls. Cellular services are flexible, but may attract high roaming charges away from the home area.
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