For the first half of the 20th century, most payphones were built by The Gray Telephone and Pay Station Co. of Hartford, Connecticut under contract with Western Electric and other leading companies. In 1889 William Gray got a patent for his innovative coin payment mechanism, which others were unable to replicate. The company also pioneered the popular and highly collectible 'three-slot' (nickel, dime, quarter) payphone configuration popular in the 1940s, 50s and 60s.

Before three-slots, Gray made ‘coin collectors,’ or telephones that required coins to be used to activate them. Some were separate units that attached to a wood wall or candlestick phone and just collected the coin. The operator could hear the coin going in over the line, and authorize the call. Some were a combination coin collector and built-in phone. They sat on bar tops or in phone booths or at a boarding house or a dime store. These coin operated devices locked the phone so people couldn’t use it until money was deposited to make the phone operational.