Path: utzoo!news-server.csri.toronto.edu!cs.utexas.edu!usc!snorkelwacker.mit.edu!bu.edu!telecom-request From: jimmy@icjapan.info.com (Jim Gottlieb) Newsgroups: comp.dcom.telecom Subject: Re: The Great US Telephone Conspiracy Message-ID: Date: 3 Mar 91 11:40:08 GMT Sender: news@bu.edu.bu.edu Reply-To: Jim Gottlieb Organization: Info Connections, Tokyo, Japan Lines: 103 Approved: Telecom@eecs.nwu.edu X-Submissions-To: telecom@eecs.nwu.edu X-Administrivia-To: telecom-request@eecs.nwu.edu X-Telecom-Digest: Volume 11, Issue 176, Message 5 of 6 In article John Higdon writes: > If you stop to think about it, why have there > been no attempts to establish a stored value card system for public > telephones? They are found in a number of other countries, including > Japan. Most Americans that I talked to there liked the system and used > it. I do not believe that it would be rejected by the American public. I must admit that I find the public telephone debit cards to be convenient, and for tourists and other transients they are great. But I disagree that America should try to emulate them. First of all, I have problems with the whole idea of stored-value cards. The fraud potential is way too high when you leave the balance in the hands of the consumer. I even saw a TV program here in Japan about a year ago that showed exactly how to beat the system. Telephone cards have been extremely successful here, but I would say that other stored-value cards have not. There are now cards for several of the convenience stores (7-11, etc.), department stores, and even cards that work only in Coke machines. I don't think I have ever seen anyone using any of the other cards. Telephone cards worked because telephones only take one or two types of coins, no bills, one must continually dump coins in while one talks, and they don't make change. Having a telephone card prevents this hassle. Why would one want to have a 7-11 card? 7-11 stores take any coin, any bill, and they give change. And the whole idea of having to carry around a different card for each store or vending machines starts to undermine the idea of a universally accepted currency. I heard a while back of an effort to create a card that would be accepted by a variety of merchants. They talked of the problem of how to disperse the payments. I have not heard any mention of this plan since. In the U.S. we already have such a system. It's called the banking system. Even if we exclude cash and credit cards, one can pay with a check (bank draft) or one can pay with one's ATM card. Japan would do better to allow the use of ATM cards as has been done in the U.S. The system is in place and would work, but probably only after 24-hour ATM operation was established (ATMs in Japan close at 7 PM and only recently started operation on Sundays) because the system must always be on line. And of course, your bank account balance isn't stored on your ATM card. Which brings us back to the call for such a stored-value card system for use on U.S. phones. Just like the above, I would say that we already have a better system in place; credit cards and calling cards. Stored-value telephone cards are also popular because using one costs no more than using cash. I call on U.S. telephone and long distance companies to eliminate calling card and credit card surcharges. Almost everyone has a credit card or has (or can get) a calling card. I would never put cash in a phone again if there were no surcharge to use my calling card. There is no reason to start a whole new currency when we have a far superior system already in place. It just needs to be properly implemented. Jim Gottlieb Info Connections, Tokyo, Japan E-Mail: or Fax: +81 3 3237 5867 Voice Mail: +81 3 3222 8429 [Moderator's Note: It is a little-known fact that 60-75 years ago, there was an unusual way of handling pay phone calls: the merchant slug, which you purchased from the clerk in the store for use in the pay stations ONLY in that store. If a store was part of a chain, then the telephone slug would work in any of the payphones in any branch of the store, but never in the payphone of a competing store. The Walgreen's Drug Store chain started here in Chicago. In 1920, they had about a dozen outlets here, all of which had convenient payphones for public use. The telephones would not work on coins, and had to have slugs puchased from the Walgreen's cashiers. Local payphone calls were five cents each, which was the value of the individual slug; but you could buy a packet of ten slugs for 45 cents, and use them for any combination of local or long distance calls. Both Sears, Roebuck and Montgomery Ward, two large chains with their roots here also used the slug-style payphones, and their phones would not accept Walgreen slugs. Neither would Walgreens accept slugs from Sear, Wards or the Boston Store. Most merchants discounted the slugs, selling a packet for 45 cents. Some sold them for 44 cents, etc. The payoff to the telco (Chicago Telephone Company in those days, the predecessor of Illinois Bell, which came along in the middle twenties) came when the collector came to empty the coin boxes. He would empty the box and take all the slugs back to the cashier. The cashier paid four cents each for them, meaning a one cent profit or commission per payphone call, or nine-and-a-half / ten cents profit per ten calls, depending on if the merchant chose to sell several at a slight discount. The idea was if you needed to make a phone call and only had Walgreen slugs you had to go to Walgreen's to make the call, and while you were there you might as well do some shopping, etc. The same slugs kept circulating over and over, the customer buying them; using them and the telco selling them back to the cashier for re-use. They finally quit using slugs sometime around 1930. PAT]