Payphones were preceded by pay stations, manned by telephone company attendants who would collect payment for calls placed. The Connecticut Telephone Co. reportedly had a payphone in their New Haven office beginning June 1, 1880; the fee was handed to an attendant. In 1889, a public telephone with a coin-pay mechanism was installed at the Hartford Bank in Hartford, Connecticut by the Southern New England Telephone Co. It was a "post-pay" machine; coins were inserted at the end of a conversation. The coin mechanism was invented by William Gray; he was issued a series of patents for his devices, beginning with US#454470 issued Jun 23, 1891 for a 'Signal Device for Telephone Pay-Stations' which rang a bell for each coin inserted. He subsequently founded the Telephone Pay Station Co. in 1891. The "pre-pay" phone debuted in Chicago in 1898.
By 1902 there were 81,000 payphones in the United States. By 1905, the first outdoor payphones with booths were installed. By the end of 1925, 25,000 of these booths existed in New York City alone. In 1960, the Bell System installed its one millionth telephone booth. After the divestiture of Pacific Bell (California) and AT&T in 1984, it wasn't long before independent stores selling telephones opened up. After that privately owned payphones hit the market. In 2000, there were over 2 million payphones in the United States, although today that number is less than 500,000 and the major carriers, AT&T and Verizon, have both exited the business, leaving the market to be served by independent payphone companies.