For over a decade now, prepaid calling cards have been a growing business. The idea of prepaid calling card was first thought of by a vending machine manufacturer and operator in Italy way back in 1975 during which time there was a shortage in coins for use in pay phones. But only in 1976 that the first phone card was introduced. It was made of thin printed cardboard with magnetic strips and is inserted into the phone where it would deduct minutes from the card. The first batch of phone cards encountered problems, just like any new product. The cards were too thin and easily jammed the pay phone. Nevertheless, its novel idea spread across the continent and was adapted by European countries in 1977 the first of which were Austria, France, Sweden, and the United Kingdom. In 1982, Japan, who was also faced with coin shortage problem, adapted the phone card system to solve the situation.



Along with the adaptation of the phone cards by these countries, the quality of the material used gradually improved. By 1984, France introduced the first chip-based “smart card.” Then in 1987, phone cards were introduced to the United States whose quality was better than that of Europe's “smart card.” The U.S. created a card with magstripe, a technology similar to that of the magnetic strip. The U.S. was the first country to mass produce these phone cards in 1989.

In 1990, New York came with a non-magstripe phone card which is similar to prepaid phone card today. The new system requires dialing a toll free access number and using a personal identification number, or PIN, to place charges on your account. The system was considered the most versatile among the phone cards. It allows used with any type of phone.

The phone card industry has continued to prosper over the years. In 1992, telecommunication giants released their own brand of phone cards without the magstripe and completely switched to an access number and PIN.

Over the years, the prepaid calling card business exploded and has become a very lucrative business. In the new millennium, it became a multi-billion industry in view of its diverse marketing and unlimited client potential.

What is behind the success of prepaid calling cards?

Prepaid calling card is cheaper than regular phone service. You can save money on your long distance calls by simply using prepaid phone cards. Not too long ago, making an overseas call to a family member or friend was very expensive and prohibitive. Nowadays, rates have considerably gone down and anyone can buy prepaid calling cards that allow access from anywhere.

The most important advantage which the prepaid card calling services offer is convenience and flexibility. It aids consumers and business end-users to effectively plan and formulate a budget for their long distance calls on a regular basis.

Even in the advent of advancing technology such as the Internet and mobile phones, which services pose some limiting factors, prepaid calling card is definitely not going away. It is here to stay.