Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, August 3, 1994 TAG: 9408030078
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: MEGAN SCHNABEL
DATELINE: LENGTH: Medium
Prepaid, use-'em-and-toss-'em calling cards have been popping up at convenience stores and telephone centers nationwide in recent months, the latest offerings in the telephone giants' continuing battle for long-distance dollars.
Sprint Communications' "Instant Foncards" will be the first of the prepaid cards to hit the Roanoke area. East Coast Oil Corp., a Richmond convenience-store retailer with an outlet on Roanoke's Orange Avenue, has contracted with Sprint to sell the cards at the grocer's 40 locations. The cards are scheduled to arrive by the end of this week.
"It'll take a little while to catch on, but I think it'll be great for the consumers once they get used to using them," said store manager Denise Nunley. "I'm going to send one to my brother in Florida because he never calls me."
Telephone companies like Sprint, MCI and AT&T are hoping more consumers will take Nunley's cue. So far, prepaid cards represent only a small portion of the multibillion-dollar domestic long-distance market.
Worldwide, however, prepaid calling cards are a $4 billion business, said Sprint spokesman Bob White. And with the exposure the cards have been receiving in the U.S., he expects the domestic market to reach $1 billion within a matter of years.
The cards are available in varying denominations depending on the issuing company. Sprint, for example, offers cards with face value of $5, $10, $20 and $50. The rate for spending on them varies with the card denomination, from 50 cents per minute for the $50 cards to 60 cents with the $5 cards.
Similar cards sold by AT&T and MCI also charge 50 to 60 cents per minute. Customers can place international calls with all three cards at rates that typically start at about $1.80 per minute.
Using the prepaid cards is much like charging calls to phone companies' conventional calling cards. The caller dials an 800 number and, after hearing a prompt, enters the numeric code printed on the back of the card.
At the beginning and end of each call, the service tells the customer how many units of time or dollars remain on the card. The caller also can enter a second card number during the conversation if the original card runs out.
The difference is in payment and security. Rather than being tallied up on a bill at the end of the month, the charges made on a prepaid card are deducted automatically from the card's value. And because each card is good only for a specified number of minutes or dollars, thieves can't use stolen card numbers to rack up huge charges.
Prepaid cards, which have been used widely in Europe for a decade, hit the U.S. market on a limited basis early in 1993. Domestically, the cards are being targeted at frequent travelers and at consumers who cannot or will not obtain regular calling cards.
The cards also are gaining popularity in business circles, where they may be given as promotional gifts or used to keep track of calling expenses on the road, White said.
Even collectors are getting in on the calling-card boom. Although the cards technically are disposable - once the face value of the card has been used, the card becomes invalid - a number of companies around the nation have begun marketing prepaid cards featuring photos of celebrities and sports heroes.
Many people buy these specialty cards as collector's items and never use them for phone calls, said J.P. Paciorek, marketing director of Champion Sports Collectibles, a California-based company that recently began selling cards that sport vintage baseball photos.
As communications technology - and card aesthetics - continue to improve, expect to see more and more uses for the prepaid card.
"Right now, the applications for debit cards are endless," said Laura O'Brien of MCI, which, in March, began marketing its cards on a regional basis after a year of testing. "It's only limited by imagination."
by CNB