The provider provided (say) 10 minutes of service, but got to keep all of the money (say 20 minutes).
When the Internet got relatively mature, sale of any sexual service not involving a minor could be made to anyone not a minor.
Once means of transmitting payment were developed, phone sex turned into primarily a commercial activity, with customers (overwhelmingly male) and sellers (overwhelmingly female).
Phone sex conversation may take many forms, including: guided fantasy, sexual sounds, narrated and enacted suggestions; sexual anecdotes and confessions; candid expression of sexual fantasies, feelings, or love, and/or discussion of very personal and sensitive sexual topics.
By the end of the 1980s, nearly all of the major local phone companies in the United States, plus the major long distance carriers, were actively involved in the adult chat line business.
The telephone companies would provide billing services for chat line companies.
With the progress of technology it became more practical, convenient, and economical for providers to work out of their homes.
Human dispatchers — female, except for gay male phone sex — answered the advertised phone numbers, processed payment via credit card, chose who of the available performers in the dispatcher's judgment best matched the clients' fantasy (grandma, black girl, college girl, etc.), and connected the client with the provider. Either could hang up, though some services put economic pressure on providers not to do so.
If a customer disputed a charge, the telephone company would usually “forgive” the charge but block the caller from calling any other chat lines.