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Response Letter

      May
      16, 2005

      VIA
      EDGAR

Mr. Larry
Spirgel

Assistant
Director

Office of
Small Business

Division
of Corporation Finance

United
States Securities and Exchange Commission

450 Fifth
Street, N.W., Mail Stop 0407

Washington,
D.C. 20549

      Re:

      Q
      Comm International, Inc.

      Form
      10-KSB for the year ended December 31, 2004

      File
      No. 001-31718

Dear Mr.
Spirgel:

This
letter responds to the Staff’s comment letter dated May 5, 2005 regarding the
above-referenced report filed by Q Comm International, Inc. (the “Company”). For
ease of reference, your inquiries have been incorporated in this letter and
precede our responses. If you have any questions regarding the responses to your
comments, please feel free to call me directly at (801) 226-4222.

General

      1.

      We
      note from the Company’s Forms 10-KSB for the years ended December 31,
      2003, and December 31, 2004, that your revenues exceeded the limit for
      small business issuers for two consecutive years. See Item 10(a)(1) and
      (a)(2)(iii) of Regulation S-B. As you are no longer a small business
      issuer, please confirm in your response letter your understanding that the
      company is no longer eligible to use the small business forms, beginning
      with the first quarterly report in fiscal year
      2005.

We
confirm that we are no longer eligible to use the small business forms and that
our Form 10-Q filing for the period ended March 31, 2005 and future periodic
filings will be in accordance with Regulation S-X.

Item
6. Management’s Discussion and Analysis or Plan of
Operations

Sources
of Revenue, page 16

      2.

      We
      note that you sell terminals under the service bureau arrangements.
      Provide us with more details of these arrangements, your accounting for
      them and your basis in the accounting literature.

Service
Bureau customers are those who license our proprietary software, install and
maintain the software on their server hardware, and purchase terminals to
install in retail establishments they contract with. All except one of our
service bureau arrangements are with customers outside the U.S. In these
arrangements, we do not have an obligation to maintain their system, service
their customers, procure and inventory products, or provide terminal support for
retail locations.

Our
service bureau contracts separately identify pricing for software licensing,
installation and set up, purchases of terminals, future technical support billed
at hourly rates, and ongoing fees based on either transaction volume or revenues
processed through the system. Each of these deliverables has value to the
customer on a standalone basis and comprises a separate unit of accounting, as
defined in EITF 00-21. Revenues for each of these elements are based on the
value of the services, software or terminals sold as determined by vendor
specific objective evidence. We do not “bundle” services with the price of the
terminals. License
and set up fees are deferred and recognized over the term of the agreement if
material.  There is
no right of return for software or terminals and sales for overseas customers
are on a cash basis. Total revenues from service bureau contracts totaled
$347,273 in 2004, which is less than 1% (0.85%) of total revenues for that
year.

Based on
our evaluation of the criteria outlined in SEC Staff Accounting Bulletin 101 -
Revenue Recognition in Financial Statements (SAB 101), we have met the
requirements to record the revenue from the sale of terminals at the time of
sale. This is based on the following criteria outlined in SAB 101: i) persuasive
evidence of an arrangement exists, ii) delivery has occurred, iii) the price of
the terminals is fixed, and iv) collection is assured since payment in advance
is required

Critical
Accounting Policies and Estimates

Revenue
Recognition, page 19

      3.

      We
      note that under the broker model you record transactions on a gross basis.
      We further note your statement that “carriers determine prices for their
      products and we do not control the frequency or the quantity of sales” and
      “some provide us with product on consignment.” Please tell us the factors
      you considered in making the determination that reporting on a gross basis
      is appropriate. Provide a detailed analysis of EITF 99-19 including your
      assessment of each of the indicators of gross reporting and each of the
      indicators of net reporting.

As a
brief background, we are in the business of providing various prepaid products,
such as prepaid long distance, prepaid wireless airtime and prepaid debit cards.
These products are sold in the form of a pin number (“PIN”) which the consumer
uses to activate the product. We have developed a proprietary electronic
distribution system for these products that includes a terminal located in a
retail establishment and a back-end processing system to manage PIN inventory,
process transactions, generate ACH transaction files to receive and pay funds
due, and provide reporting to those involved in the distribution channel. The
terminal prints the PIN and activation instructions necessary for the consumer
to utilize the product. The success of our business is based on having both a
wide array of products to offer and a large network of retail locations offering
these products through our terminals.

There are
two scenarios under which we provide products and services within the broker
model. The first is where we buy products in advance from suppliers and resell
them through our distribution system. The second is where we receive PINs on
consignment from suppliers and sell them through retailers the supplier has
secured and/or through our existing retail network. We will address each of
these scenarios separately.

2

We
typically purchase for our inventory 1) prepaid wireless products for large
national wireless carriers such as AT&T, Cingular, T-Mobile, and Verizon,
and 2) various regional products with significant demand such as Boost,
Airvoice, Tracfone and Page Plus. To a lesser degree we purchase for our
inventory various prepaid long distance products. Our assessment of gross vs.
net revenue reporting based on the criteria set forth in EITF 99-19 for these
products is as follows:

Indicators
of Gross Revenue Reporting

1)
We
are the primary obligor in the arrangement. We take
possession of the PINs and manage them in our system, including fulfillment of
PINs sold at retail locations. We are responsible if the wrong product is
delivered or if no product is available. We are responsible if the consumer is
unable to use the PIN for any reason or requests a refund. 2) We
have both general inventory risk and physical loss inventory
risk. If
products we purchase become obsolete prior to sale we generally have no recourse
with the suppliers. We have full risk for any product that is lost or stolen. 3)
We
have latitude in establishing price. Most of
our retail locations are brought to us by independent sales organizations we
refer to as brokers. We set the pricing for the brokers, who in turn set pricing
for their retailers. We set pricing for the retailers in cases where we have a
direct relationship with the retailer (i.e. no broker exists). The comment on
page 19 of our Form 10-KSB referenced above in your comment, “carriers determine
prices for their products…” refers to the fact that suppliers set the
denominations for the product, which is the price paid by the consumer. 4)
We
change the product or perform part of the service. In the
prepaid products industry, PINs are traditionally sold in the form of cards with
a PIN printed on the back. Consumers “scratch” the back of the card to reveal
the PIN after purchase. Product delivery through printed physical cards results
in suppliers, brokers and retailers incurring the costs of carrying inventory as
well as the costs of inventory shrinkage and stock-outs. The offering of
electronic delivery increases the value of the product due to the elimination of
these costs. This increase in value is evidenced by the fact that retailers are
typically willing to pay a higher price for product delivered electronically vs.
physical card inventory. 5) We
are involved in the determination of product or service
specifications. While
we do not have the ability to determine the specifications of the products we
offer, we negotiate service specifications with our brokers and direct
retailers, including marketing support, retailer technical support and training,
billing and collection. 6) We
have credit risk. We have
no recourse with the supplier if we are unable to collect the amount due from
the retailer.

Indicators
of Net Revenue Reporting

1)
We do
not have discretion in supplier selection. The
absence of this indicator of gross revenue reporting is due to the nature of the
product; consumers and retailers want “brand name” products offered only by the
supplier (e.g. Verizon Wireless).

Conclusion

The
indicators present a strong case for gross revenue reporting. There are no
indicators of net revenue reporting as outlined in EITF 99-19, only an absence
of one indicator of gross revenue reporting noted above.

The
second scenario deals with consignment products. These consignments are arranged
with smaller regional prepaid long distance or prepaid wireless providers. In
some cases, suppliers are willing to offer products to us on consignment as an
inducement for us to offer their products to our network. In these cases we
remit payment to the supplier at the time the PIN is sold. Other than the timing
of payment to the supplier, there is essentially no difference between the
indicators for these products and those described above. However, we have two
significant customers who are regional wireless carriers. In these cases, we
sell their products through retailers they have secured for product
distribution. They have characteristics of both a product supplier and a broker.
With one of the customers we have the ability to sell other products in our
library to their retailers; in the other instance we are only able to offer the
supplier’s products. Our assessment of gross vs. net revenue reporting based on
the criteria set forth in EITF 99-19 for the products supplied by these two
customers is as follows:

3

Indicators
of Gross Revenue Reporting

1)
We
are the primary obligor in the arrangement. We take
possession of the PINs and manage them in our system, including fulfillment of
PINs sold at retail locations. We are responsible if the wrong product is
delivered or if no product is available. Even though the supplier has brought
the retail relationship to us, we still enter into a direct contract with the
retailer for product delivery and related services. 2) We
have physical loss inventory risk. We have
full risk for any product that is lost or stolen. 3) We
change the product or perform part of the service. In the
prepaid products industry, PINs are traditionally sold in the form of cards with
a PIN printed on the back. Consumers “scratch” the back of the card to reveal
the PIN after purchase. Product delivery through printed physical cards results
in suppliers, brokers and retailers incurring the costs of carrying inventory as
well as the costs of inventory shrinkage and stock-outs. The offering of
electronic delivery increases the value of the product due to the elimination of
these costs. This increase in value is evidenced by the fact that retailers are
typically willing to pay a higher price for product delivered electronically vs.
physical card inventory. 4) We
are involved in the determination of product or service
specifications. While
we do not have the ability to determine the specifications of the products of
these suppliers, we negotiate service specifications provided to customers,
including marketing support, retailer technical support and training, billing
and collection.

Indicators
of Net Revenue Reporting

1)
The
amount we earn is fixed. The
supplier is able to set the price to the retailer since they control the retail
relationship. Therefore, we do not have latitude in setting price except for
products we sell that are not the suppliers’ products. 2) The
supplier has credit risk. Since the
supplier also has the role of a typical broker in our business model, they
assume the credit risk for non-payment of products sold at the retail
relationships they have provided to us.

Conclusion

While
there are indicators of both gross and net revenue reporting, we believe those
indicators supporting gross revenue reporting outweigh those supporting net
revenue reporting. In addition, we have taken investor transparency into account
when making this determination. This concept was discussed by the EITF in
Issue
Summary No. 1, Supplement No. 3 to EITF
99-19. Task force members noted that a mix of both gross and net revenues could
result in investor confusion about critical measures of the business. When
discussing these issues the task force noted, “As a result, a user of the
financial statements could lose the benefit of transparency regarding changes in
a company’s gross margin, particularly if the percentage mix of gross versus net
revenues varies significantly from period to period.” We agree with this
observation and believe that users of our financial statements would have
difficulty assessing the true margin and direct costs of our business with
revenues from similar products and transactions being reported in differing ways
based solely on supply arrangements. Furthermore, the predictability of our
business model would be significantly reduced due to the addition of unknown
factors such as future revenue mix changes, which for us could be
significant.

4

Consolidated
Statements of Operations and Comprehensive Loss, page
27

      4.

      Since
      the captions “cost of goods sold” and “gross profit” exclude depreciation
      and amortization for property and equipment and capitalized software
      development costs directly attributable to the generation of revenue, we
      believe that this presentation inappropriately reports a figure for income
      before depreciation and amortization. As required by SAB 11:B, revise your
      presentation to either reclassify the applicable depreciation and
      amortization to “cost of good sold” or remove the caption “gross profit”
      and indicate the amount of applicable depreciation and amortization that
      is excluded from “cost of sales.” Please revise this presentation
      accordingly throughout your
document.

We agree
with the staff’s comment and will adopt the second of the two alternatives
outlined above. We propose that we make this change on a prospective basis
beginning with our Form 10-Q for the period ended March 31, 2005.

Consolidated
Statements of Cash Flows, page 29

      5.

      We
      note your inclusion of “proceeds from capital leases” in cash flows from
      financing activities. This item appears to be a non-cash investing and
      financing activity. Please revise your statement to comply with paragraph
      32 of SFAS 95.

We
entered into two capital lease arrangements during the year ended December 31,
2004. These arrangements were with third-party leasing companies. In one case,
cash for the purchase of the equipment equal to the lease amount was paid
directly to us. In the other case, a portion of the proceeds of the lease was
paid to us and the remainder of the proceeds was paid directly to the equipment
manufacturer.

According
to SFAS 95, paragraph 32, “Information about all investing and financing
activities of an enterprise during a period that affect recognized assets or
liabilities but that do not result in cash receipts or cash payments in the
period shall be reported in related disclosures…some
transactions are part cash and part noncash; on