In May 1955, design and development work begins on a new type of public telephone. Until now, users have paid after the call is anwered, but the new model will require payment before dialing. Problems with the old system include cutting off the recipient leaving only a one-way connection if the caller is late in depositing coins, and the fact that the exchange register counts such calls as connected. By December, the No. 5 Automatic Desktop Public Telephone Set using the pay-before-calling system and No. 5 Automatic Booth-Type Public Telephone Set are introduced. The new type of phone is designed with a coin return linked to the receiver hook mechanism to return coins in case of busy signals or unanswered calls. From this point on, all public telephones will be of the pay-before-calling type. By Showa 57 (1982), the concept of the cashless era will lead to the introduction of the telephone card, which requires no coins.

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