Abstract: A pay telephone system which does not require the use of dedicated facilities in a telephone company and central office and which provides more efficient means for utilizing existing facilities to place public telephone calls. For only selected user telephone numbers, the telephone system places a set-up call to a call processor to request billing and other information needed to process the call at the local processor. The set-up call is then terminated and the user's call is automatically re-dialed into the switched telephone network from the telephone central office which serves the telephone presently being used. Numbers other than the selected numbers are called directly.