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Calling card business is easy market to enter

Date: 10/14/2008 12:04:28 PM

One reason that the prepaid calling card market is ripe for fraud and deception is that it is so easy to get into the business.

Calling card providers dont need to run their own telecommunications networks. Instead, they just need to buy wholesale long-distance minutes from telecom carriers.

For domestic calls, the card companies lease lines from big U.S. carriers such as AT&T Inc. and Verizon Communications Inc. And for international calls, they buy minutes from the many termination carriers that focus on different parts of the world.

The other pieces of the puzzle that calling card providers need are back-end computer platforms and databases that connect customers with the places they are calling, generate PIN numbers, assign calling rates, assess fees and charges and handle billing.

Calling card companies can purchase part or all these systems from third-party vendors - some of which provide both the back-end technology and the calling minutes all in one plug-and-play package.

From there, it is up to the card providers to set the calling rates they want to charge and the fees they want to impose.

Parwan Electronics Corp., an Aberdeen, N.J.-based company that provides software and systems for more than 300 companies in the prepaid calling card business, is open about the creative ways card vendors should think about their fees. In a page on its Web site, under the header Making Money in the Industry, Parwan Electronics lists such options as activation fees, connection fees, maintenance fees and something called a disconnect fee factor.

Vinay Tschand, chief operating officer of Parwan Electronics, readily acknowledged that all these charges are simply gimmicks that we have to incorporate even though they arent legitimate.

Tschand explained that Parwan Electronics customers generally start out in the business without imposing any of these fees, but quickly discover that they cant compete without them.

He added that all the fees amount to a lot more back-end programming work for Parwan.

We really wish these things didnt exist, he said. It would make our lives much easier - both technologically and ethically.

PCS Tags: Calling Card, International Calling Card, Phone Card, Prepaid Calling cards

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Source: http://canadianpress.google.com/article/ALeqM5gsVDCFjhPZRd-fmekpUBPGUsdsVw


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