UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------

                                   FORM 10-QSB

(Mark one)
|X|   QUARTERLY Report purSUANT TO Section 13 or 15(d) of the
      Securities Exchange Act of 1934

      For the quarterly period ended July 31, 1998

|_|   Transition Report Pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934

      For the transition period from _______________ to _______________ 

      Commission file number 1-8460


                          UNIVERSAL MONEY CENTERS, INC.
        (Exact name of small business issuer as specified in its charter)


            Missouri                            43-1242819
 (State or other jurisdiction of   (I.R.S. Employer Identification No.)
 incorporation or organization)


                 6800 Squibb Road, Shawnee Mission, Kansas 66202
                    (Address of principal executive offices)


                                 (913) 831-2055
                           (Issuer's telephone number)


      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the Securities and Exchange Act during the past 12 months
(or for such  shorter  period  that the  registrant  was  required  to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.  Yes  __    No    X   

      Number of shares  outstanding  of each of the  issuer's  classes of common
equity as of April 14, 1999:  39,293,069  shares of Common Stock, $.01 par value
per share

      Transitional Small Business Disclosure Format:   Yes __  No  X


                                    Page - 1
<PAGE>


NOTE CONCERNING THIS FILING

      Concurrently with the filing of this Form 10-QSB, Universal Money Centers,
Inc.  (the  "Company")  is also filing  with the SEC a Quarterly  Report on Form
10-QSB for the fiscal  quarter ended October 31, 1998. In addition,  the Company
intends  to file with the SEC its  Annual  Report on Form  10-KSB for the fiscal
year  ended  January  31,  1999 on or before its due date,  May 3, 1999.  Unless
otherwise indicated herein, this Form 10-QSB provides information concerning the
Company  as of July 31,  1998  and for the  period  ended  July  31,  1998.  The
discussion  in  this  Form  10-QSB  should  be  read  in  conjunction  with  the
discussions of subsequent  periods  contained in the periodic reports  described
above.

NOTE CONCERNING FORWARD-LOOKING STATEMENTS

      Certain statements  contained in this Quarterly Report on Form 10-QSB that
are not  statements of historical  fact  constitute  forward-looking  statements
within the meaning of Section 21E of the  Securities  Exchange  Act of 1934,  as
amended (the "Exchange Act").  These statements  involve risks and uncertainties
that  may  cause  actual  results  to  differ  materially  from  those  in  such
statements.  See Part I, Item 2 "Management's Discussion and Analysis or Plan of
Operation - Cautionary  Statement  Concerning  Forward-Looking  Statements"  for
additional   information   and  factors  to  be   considered   with  respect  to
forward-looking statements.


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                         PART I - FINANCIAL INFORMATION

Item 1.         Financial Statements

                          UNIVERSAL MONEY CENTERS, INC.

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                               July 31, 1998   January 31, 1998
                                               (unaudited)
                                               -------------   ----------------

CURRENT ASSETS
   Cash                                         $  271,882      $  374,675
   Notes receivable - affiliate                    210,000               0
   Accounts receivable - trade, less allowance  
        for doubtful accounts:                   
            July 31, 1998 - $21,380;            
            January 31, 1998 - $21,380              33,304          87,256
   Accounts receivable - affiliate                  11,144           2,340
   Inventories                                         300             300
   Prepaid expenses and other                        8,493           9,176
   Interest receivable - affiliate                   2,140           2,059
                                                -------------  ----------------
                     Total Current Assets          537,263         475,806
                                                -------------  ----------------
                                                
PROPERTY AND EQUIPMENT, At cost                 
   Equipment                                     2,944,605       2,578,635
   Leasehold improvements                          117,803         117,803
   Vehicles                                          9,722           9,722
                                                -------------  ----------------
                                                 3,072,130       2,706,160
   Less accumulated depreciation                 1,667,935       1,475,325
                                                -------------  ----------------
                                                 
Total Property and Equipment                     1,404,194       1,230,835 
                                                -------------  ----------------
                                                
OTHER ASSETS                                    
   Deferred income taxes                           315,000         315,000
   Other                                            32,155          12,383
                                                -------------  ----------------
                     Total Other Assets            347,155         327,383
                                                -------------  ----------------
                                                
                     Total Assets               $2,288,612      $2,034,024
                                                =============  ================
                                                
                                                
                                                
                                                
See Notes to Consolidated Financial Statements  (Unaudited)
                                               

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                          UNIVERSAL MONEY CENTERS, INC.

                           CONSOLIDATED BALANCE SHEETS


                      LIABILITIES AND STOCKHOLDERS' EQUITY




                                               July 31, 1998  January 31, 1998
                                                (unaudited)
                                               -------------  ----------------

CURRENT LIABILITIES
   Current maturities of long-term debt
     and capital lease obligations             $   120,631    $   206,040
   Accounts payable                                281,615        296,455
   Accounts payable - affiliate                          0         35,551
   Accrued expenses                                251,373        223,496
                                               -------------  ----------------
                Total Current Liabilities          653,619        761,542
                                               -------------  ----------------


LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS       646,294        392,945
                                               -------------  ----------------

STOCKHOLDERS' EQUITY

   Common stock; no par value; $.01 stated
     value;
      40,000,000 shares authorized;
      39,851,380 issued as of 7/31/98 and
      1/31/98                                      398,514        398,514
   Additional paid-in capital                   18,593,430     18,593,430
   Retained earnings (deficit)                 (16,340,937)   (16,450,099)
                                               -------------  ----------------
                                                 2,651,007      2,541,845

   Less treasury stock, at cost; common
     stock
      558,311 shares as of 7/31/98 and          
      1/31/98                                   (1,662,308)    (1,662,308)   
                                               -------------  ----------------
                Total Stockholders' Equity         988,699        879,537
                                               -------------  ----------------

                Total Liabilities and
                 Stockholders' Equity          $ 2,288,612    $ 2,034,024
                                               =============  ================








See Notes to Consolidated Financial Statements (Unaudited)

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<PAGE>


                          UNIVERSAL MONEY CENTERS, INC.
                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

                                  Three Months Ended      Six Months Ended
                                       July 31,               July 31,
                                 1998          1997       1998         1997
                                 ----          ----       ----         ----

NET REVENUES                   $ 1,240,536 $ 1,010,370 $ 2,395,956  $ 1,887,225

COSTS OF REVENUES                  846,974     601,384   1,622,179    1,128,638
                                 ---------   ---------   ---------    ---------

GROSS PROFIT                       393,562     408,986     773,777      758,587

OPERATING EXPENSES                 289,481     244,738     597,112      466,976
                                 ---------   ---------   ---------    ---------

INCOME FROM OPERATIONS             104,081     164,248     176,665      291,611
                                 ---------   ---------   ---------    ---------

OTHER INCOME (EXPENSE)
             Interest income         6,353       6,260      12,360        9,721
             Interest expense      (47,063)    (18,271)    (79,863)     (36,681)
             Other                       0           0           0            0
                                 ---------   ---------   ---------    ---------
                                   (40,710)    (12,011)    (67,503)     (26,960)
                                 ---------   ---------   ---------    ---------

INCOME BEFORE INCOME TAXES          63,371     152,237     109,162      264,651

INCOME TAX PROVISION (CREDIT)           --          --          --           --

NET INCOME                     $    63,371 $   152,237 $   109,162  $   264,651
                                 =========   =========   =========    =========

BASIC & DILUTED EARNINGS PER
SHARE                          $    0.0016 $    0.0039 $    0.0028  $    0.0067
                                 =========   =========   =========    =========










See Notes to Consolidated Financial Statements (Unaudited)


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<PAGE>


                          UNIVERSAL MONEY CENTERS, INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                               Six Months          Six Months
                                                Ended                Ended
                                             July 31, 1998       July 31, 1997
                                             -------------       -------------

CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                 $ 109,162          $  264,651
    Items not requiring (providing) cash:
          Depreciation                           202,730             146,076
          Loss on disposal of property
            and equipment                             --                 125
          Deferred income taxes                       --                  --
    Changes in:
          Accounts receivable                     45,067            (153,969)
          Inventories                                 --               7,873
          Prepaid expenses and other             (19,089)              3,475
          Accounts payable and accrued
            expenses                             (22,514)             23,021
                                             -------------       -------------
            Net cash provided by (used
            in) operating activities             315,356             291,252
                                             -------------       -------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment          (234,865)           (243,458)
    Increase from notes receivable -            
      affiliate                                 (210,000)           (202,000)
    Proceeds from sale of property and
      equipment                                       --                 150
                                             -------------       -------------

         Net cash provided by (used in)
          investing activities                  (444,865)           (445,308)
                                             -------------       -------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Principal payments under long-term debt
      and capital lease obligations             (122,764)           (118,166)
    Proceeds from issuance of long-term
      debt                                       149,480              51,000
    Proceeds from issuance of common stock            --              (2,747)
    Purchase of treasury stock                        --                  --
                                             -------------       -------------
          Net cash provided by (used in)
            financing activities                  26,716             (69,913)
                                             -------------       -------------

INCREASE (DECREASE) IN CASH                     (102,793)           (223,969)

CASH, BEGINNING OF PERIOD                        374,675             325,646
                                             -------------       -------------

CASH, END OF PERIOD                           $  271,882          $  101,677
                                             =============       =============



See Notes to Consolidated Financial Statements (Unaudited)

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<PAGE>


                          UNIVERSAL MONEY CENTERS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  General

      The consolidated financial statements include the accounts of Universal
Money Centers, Inc. (the "Company"), and its wholly-owned subsidiaries,
Electronic Funds Transfer, Inc., Corporate Payments Systems, Inc. (inactive) and
A.M. Corporation (inactive). All significant intercompany accounts and
transactions have been eliminated in consolidation.

      The unaudited consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, they reflect all adjustments that are, in
the opinion of management, necessary for a fair presentation of the financial
results for the interim periods. Certain information and notes normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes, however, that the disclosures are adequate to
make the information presented not misleading. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's Annual Report on Form
10-KSB for the fiscal year ended January 31, 1998.

2.  Future Changes in Accounting Principles

      In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." This Statement establishes standards for
reporting information about operating segments in annual financial statements of
public business enterprises and requires disclosure f selected information about
operating segments in interim financial reports. The Statement is effective for
financial statements for periods beginning after December 15, 1997. Management
has elected to first apply this standard in the Company's 1999 fiscal year-end
reporting and believes that the adoption of this Statement will not have a
material effect on the Company's financial reporting.

3.  Earnings Per Share

      The computation of earnings per share is based upon the weighted average
number of common shares outstanding during the respective period. For all
periods reflected in the Consolidated Financial Statements, the weighted average
number of common shares outstanding was 39,293,069 shares.

4.  Supplemental Cash Flow Information

      Non-cash items for the six months ended July 31, 1998 including purchases 
of ATMs acquired under capital leases of approximately $141,224 during the 
six-month period ended July 31, 1998.

Item 2.   Management's Discussion and Analysis or Plan of Operation

Overview

      Universal Money Centers, Inc. (the "Company") operates a regional network
of automated teller machines ("ATMs"). The ATMs provide holders of debit and
credit cards access to cash, account information and other services at
convenient locations and times. At July 31, 1998, the network consisted of
approximately 269 ATMs owned by the Company and its affiliate, Universal


                                    Page - 7
<PAGE>


Funding Corporation ("Funding"), 65 ATMs owned by banks and 9 ATMs owned by
third party merchants. ATMs in the Company's network are principally installed
in convenience stores and banks with locations concentrated in the Kansas City
and St. Louis, Missouri and El Paso, Texas metropolitan areas, and the state of
Kansas. The Company also provides ATM network management services to banks and
third parties owning ATMs in the Company's ATM network.

      The Company's revenues are principally derived from two types of fees,
which the Company charges for processing transactions on its ATM network. The
Company receives an interchange fee from the issuer of the credit or debit card
for processing a transaction when a cardholder uses an ATM in the Company's
network. In addition, in most cases the Company receives a surcharge fee from
the cardholder when the cardholder makes a cash withdrawal from an ATM in the
Company's network.

      Interchange fees are processing fees that are paid by the issuer of the
credit or debit card used in a transaction. Interchange fees vary for cash
withdrawals, balance inquiries, account transfers or uncompleted transactions,
the primary types of transactions that are currently processed on ATMs in the
Company's network. The maximum amount of the interchange fees is established by
the national and regional card organizations and credit card issuers with which
the Company has a relationship. The Company (or its affiliate, Funding) receives
the full interchange fee for transactions on Company owned ATMs, but sometimes
rebates a portion of the fee to the owner of the ATM location under the
applicable lease for the ATM site. The Company also receives the full
interchange fee for transactions on ATMs owned by banks or third party vendors
included within the Company's network, but rebates a portion of each fee to the
bank or third party vendor based upon negotiations between the parties. The
interchange fees received by the Company vary from network to network and to
some extent from issuer to issuer, but generally range from $0.35 to $0.75 per
cash withdrawal. Interchange fees for balance inquiries, account transfers and
denied transactions are generally substantially less than fees for cash
withdrawals. The interchange fees received by the Company from the card issuer
are independent of the service fees charged by the card issuer to the cardholder
in connection with ATM transactions. Service fees charged by card issuers to
cardholders in connection with transactions through the Company's network range
from zero to as much as $2.50 per transaction. The Company does not receive any
portion of the service fees charged by the card issuer to the cardholder.

      In most markets the Company imposes a surcharge fee for cash withdrawals.
The Company expanded its practice of imposing surcharge fees in April 1996 when
national debt and credit card organizations changed rules applicable to their
members to permit these fees. Subsequently, surcharge fees have been a
substantial additional source of revenue for the Company and other ATM network
operators. The surcharge fee for ATMs in the Company's network owned by or
located in banks ranges between $0.50 and $1.50 per withdrawal. The surcharge
fee for other ATMs in the Company's network ranges between $0.50 and $2.50 per
withdrawal. The Company receives the full surcharge fee for transactions on
Company owned ATMs, but sometimes rebates a portion of the fees to the owner of
the ATM location under the applicable lease for the ATM site. The Company also
receives the full surcharge fee for transactions on ATMs owned by banks and
third party vendors included within the Company's network, but rebates a portion
of each fee to the bank or third party vendor based upon a variety of factors,
including transaction volume and the party responsible for supplying vault cash
to the ATM.

      The Company's profitability is substantially dependent upon the imposition
of surcharge fees. Any changes in laws or card association rules materially
limiting the Company's ability to impose surcharge fees would have a material
adverse effect on the Company.


                                    Page - 8
<PAGE>


      In addition to revenues derived from interchange and surcharge fees, the
Company also derives revenues from providing network management services to
banks and third parties owning ATMs included in the Company's ATM network. These
services include 24 hour transaction processing, monitoring and notification of
ATM status and cash condition, notification of ATM service interruptions, in
some cases, dispatch of field service personnel for necessary service calls and
cash settlement and reporting services. The fees for these services are paid by
the owners of the ATMs.

      Interchange fees are credited to the Company by networks and credit card
issuers on a periodic basis which is generally either daily or monthly depending
upon the party. Surcharge fees are charged to the cardholder and credited to the
Company by networks and credit card issuers on a daily basis. The Company
periodically rebates the portion of these fees owed to ATM owners and owners of
ATM locations. Fees for network management services are generally paid to the
Company on a monthly basis.

Comparison of Results of Operations for the Three Months and Six Months Ended
July 31, 1998 and July 31, 1997.

      Revenues. The Company's total revenues increased to $1,240,536 for the
three months ended July 31, 1998 from $1,010,370 for the three months ended July
31, 1997 and increased to $2,395,956 for the six months ended July 31, 1998 from
$1,887,225 for the six months ended July 31, 1997. This increase is primarily
attributable to an increase in the number of ATMs in the Company's network on
which the Company imposed surcharge fees for cash withdrawals. The number of
such ATMs increased to 320 at July 31, 1998 from 274 at July 31, 1997. Surcharge
fees increased to $728,019 or 58.7% of total revenues for the three months ended
July 31, 1998 from $525,007 or 52.0% of total revenues for the three months
ended July 31, 1997. Surcharge fees also increased to $1,397,976 or 58.3% of
total revenues for the six months ended July 31, 1998, from $946,160 or 50.1% of
total revenues for the six months ended July 31, 1997. The increase in total
revenues is also partially due to an increase in the number of ATMs in the
Company's network, from 304 at July 31, 1997 to 343 at July 31, 1998. The
increase in the number of ATMs resulted in an increase in the number of
transactions processed on ATMs in the Company's network. Revenues derived from
interchange fees increased to $258,361 for the three months ended July 31, 1998
from $203,731 for the three months ended July 31, 1997, and increased to
$466,208 for the six months ended July 31, 1998 from $392,383 for the six months
ended July 31, 1997. Revenues received from Funding under a Management Agreement
between the Company and Funding decreased to $143,955 and $313,025 for the three
months and six months ended July 31, 1998, respectively, from $191,489 and
$381,147 for the three months and six months ended July 31, 1997, respectively.
See "-Revenues from Funding" below. The Company's revenues from providing
network management services to banks and third parties increased to $110,201 and
$218,747 for the three months and six months ended July 31, 1998, respectively,
from $90,143 and $167,535 for the three months and six months ended July 31,
1997, respectively.

      Revenues from Funding. The Company has maintained a business relationship
with Funding since August 1989. The relationship began in 1989 as a result of
the Company's severe financial problems. The operation of the Company's ATM
network generally requires that the Company supply vault cash to ATMs owned by
the Company to fund cash withdrawals. As a result of the Company's financial
problems, lenders were generally unwilling to extend loans, partly because of
the concern that the Company's creditors would assert claims against cash
physically located in ATM's owned by the Company. The Company has not had
sufficient cash


                                    Page - 9
<PAGE>


to supply the vault cash for these ATMs. In order to resolve this problem and to
permit the Company to continue to operate certain ATMs, Funding was formed in
1989 by David S. Bonsal, the Chairman of the Company's Board of Directors, John
L. Settles, the President of the Company from April 1989 through late 1990, and
William Smithson, a shareholder of the Company. Each of these individuals has a
one-third ownership interest in Funding.

      Under a Management Agreement between the Company and Funding, Funding
provides vault cash for certain ATMs in the Company's network that are owned by
the Company or Funding, and receives all interchange fees for transactions
processed on these ATMs. At July 31, 1998 and 1997, Funding had vault cash
located in approximately 206 and 212 ATMs, respectively, owned by Funding or the
Company. The Company receives a management fee from Funding under the Management
Agreement for providing services to Funding. The management fee paid to the
Company under the Management Agreement equals Funding's "net income." Funding's
"net income" is defined in the Management Agreement as revenues from interchange
fees, less armored security charges, interest expense on funds borrowed to
provide vault cash, ATM location expenses, debt service related to the purchase
of the ATMs, taxes or insurance on ATMs, and a monthly payment to each of
Funding's shareholders representing a return on their equity investment in
Funding. For additional information, see the Company's 1998 Annual Report on
Form 10-KSB, Item 12, "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -
Universal Funding Corporation."

      Cost of Revenues. The Company's cost of revenues increased to $846,974 and
$1,622,179 for the three months and six months ended July 31, 1998,
respectively, from $601,384 and $1,128,638 for the three months and six months
ended July 31, 1997, respectively. The principal components of cost of revenues
are salaries, telecommunication services and transaction processing charges,
interchange and surcharge rebates, ATM site rentals, maintenance and repairs,
and depreciation and amortization. This increase is principally due to an
increase in interchange and surcharge rebates paid to third party owners of ATMs
included in the Company's ATM network and to ATM site owners. Rebates generally
increase approximately in proportion to increases in total revenues from
interchange and surcharge fees. The increase is also attributable to increased
depreciation associated with the larger number of ATMs owned by the Company, and
increased telecommunications expenses associated with the larger number of ATMs
in the Company's network.

      Gross Margin. Gross profit as a percentage of revenues for the three
months and six months ended July 31, 1998 was 31.7% and 32.3%, respectively, and
for the three months and six months ended July 31, 1997 was 40.5% and 40.2%,
respectively. The decrease for the three months and six months ended July 31,
1998 was caused by a number of factors, including increased interchange and
surcharge rebates, increased depreciation expense resulting from the purchase of
new ATMs and increased personnel expense and telecommunications charges
resulting from growth in the ATM network.

      Operating Expenses. The Company's total operating expenses increased to
$289,481 and $597,112 for the three months and six months ended July 31, 1998,
respectively, from $244,738 and $466,976 for the three months and six months
ended July 31, 1997, respectively. The principal components of operating
expenses are administrative salaries and benefits, occupancy costs, sales and
marketing expenses and administrative expenses. This increase is principally
attributable to salary increases and other personnel expenses.


                                   Page - 10
<PAGE>


      Other Income (Expense). The Company extends short-term loans to Funding,
which uses the proceeds as vault cash in the ATMs owned by Funding. These loans
generally have a term of one month and bear interest at 12% per annum. Interest
income primarily represents the interest paid by Funding to the Company on the
outstanding balance of these loans. Interest income increased to $6,353 and
$12,360 for the three months and six months ended July 31, 1998, respectively,
from $6,260 and $9,721 for the three months and six months ended July 31, 1997,
respectively, as a result of higher average outstanding balances.

      Interest Expense. Interest expense increased to $47,063 and $79,863 for
the three months and six months ended July 31, 1998, respectively, from $18,271
and $36,681 for the three months and six months ended July 31, 1997,
respectively. This increase was attributable to increased capital lease
obligations and notes payable related to the acquisition of additional ATMs.

      Income Taxes. The Company paid no income taxes for the three months or six
months ended July 31, 1998 and July 31, 1997, utilizing operating loss
carryforwards to reduce taxable income to zero. In addition, the Company has
recorded a deferred tax credit of $315,000 at January 31, 1998, which is
primarily a result of operating loss carryforwards which management believes are
more likely than not to be realized prior to their expiration between 2005 and
2012. Realization is dependent on generating sufficient future taxable income to
absorb the carryforwards. The amount of the deferred tax credit considered
realizable could be increased or reduced in the near term if estimates of future
taxable income during the carryforward period change. As of July 31, 1998, the
Company had approximately $195,000 of tax credits available to offset future
federal income taxes. These credits expire between 1999 and 2002. The Company
also has unused operating loss carryforwards of approximately $1,600,000, which
expire between 2005 and 2012.

      Net Income. The Company had net income of $63,371, or $0.0016 per share,
for the three months ended July 31, 1998, compared to net income of $152,237, or
$0.0039 per share, for the three months ended July 31, 1997. The Company had net
income of $109,162, or $0.0028 per share, for the six months ended July 31,
1998, compared to net income of $264,651, or $0.0067 per share, for the six
months ended July 31, 1997. Net income was lower for the three months and six
months ended July 31, 1998 principally as a result of higher costs of revenues
and operating expenses, as described above.



                                   Page - 11
<PAGE>


Liquidity and Capital Resources

      At July 31, 1998, the Company had a working capital deficit of $116,356,
compared to a working capital deficit of $285,736 at January 31, 1998. The ratio
of current assets to current liabilities improved to .82 at July 31, 1998 from
 .62 at January 31, 1998.

      The Company has funded its operations and capital expenditures from cash
flow generated by operations, capital leases and borrowings from lenders. Net
cash provided by operating activities was $315,356 for the six months ended July
31, 1998 and $291,252 for the six months ended July 31, 1997. Net cash provided
by operating activities in the six months ended July 31, 1998 consisted
primarily of net income of $109,162, depreciation of $202,730 and a decrease in
accounts receivable of $45,067, partially offset by an increase in prepaid
expenses of $19,089 and a decrease in accounts payable of $22,514. Net cash 
used in investing activities was $444,865 in the six months ended July 31, 1998 
and $445,308 in the six months ended July 31, 1997. The net cash used in 
operating activities was primarily for loans to Funding for vault cash and
purchases of plant and equipment (principally ATMs) for the six months ended
July 31, 1998. Net cash provided by financing activities was $26,716 for the six
months ended July 31, 1998, primarily as a result of increased borrowing by the
Company, compared to net cash used in financing activities of $69,913 for the
six months ended July 31, 1997. The Company had cash and cash equivalents of
$271,882 at July 31, 1998, compared to cash and cash equivalents of $374,675 at
January 31, 1998.

      During the six months ended July 31, 1998, the Company borrowed
approximately $290,704 under loan agreements and capital leases for the purchase
of approximately 39 additional ATMs. These obligations are in addition to
existing capital leases for 42 ATMs under capital lease agreements that expire
between 2000 and 2001.

      Management believes that the anticipated cash flow from operations will
provide the capital resources necessary to meet the Company's current working
capital needs and existing capital expenditure obligations. The Company expects
that its capital expenditures will increase in the future to the extent that the
Company is able to pursue its strategy of expanding its network and increasing
the number of installed ATMs. These increased expenditures are expected to be
funded from cash flow from operations, capital leases and additional borrowings,
to the extent financing is available. There can be no assurance that the Company
will be able to obtain financing under a credit facility on terms that are
acceptable to the Company or at all. The Company's expansion plans will be
limited if the Company is unsuccessful in obtaining a credit facility or other
financing.

Impact of Inflation and Changing Prices

      While subject to inflation, the Company was not impacted by inflation
during the past two fiscal years in any material respect.

Year 2000 Compliance

      General Discussion. The Year 2000 issue is the result of computer code
being written using two digits to represent years rather than four digits, which
include the century designation. Without corrective action, it is possible that
computer programs could recognize a date using "00" as the year 1900 rather than
the year 2000. Additionally, certain equipment may contain embedded chips that
include date functions that may be affected by the transition to the Year


                                   Page - 12
<PAGE>


2000. In some systems, Year 2000 problems could result in a system failure or
miscalculations causing disruptions of operations and an inability to process
transactions.

      As the operator of an ATM network, the Company relies upon computers and
related telecommunications equipment for the operation of its business. The
Company acts as an intermediary for the transfer of data between its clients and
third parties, and in doing so supplies the operating and technical resources
necessary to cause electronic data to be transmitted. The Company also owns and
operates ATMs, which utilize computer hardware and software to operate.

      The Company has initiated a Year 2000 Project ("Project2000") to locate
and address possible Year 2000 problems. The Company has assigned a project
coordinator for Project2000 who generally manages Project2000, ensures that
Project2000 meets or exceeds requirements set forth by banking regulatory
agencies including the Federal Deposit Insurance Corporation, the Federal
Reserve Bank, and the Office of the Comptroller of the Currency, and assists in
identifying points of concern and providing solutions.

      Status of Year 2000 Readiness. The Company's Project2000 consists of the
following five phases: awareness, assessment, corrective action, validation and
implementation.

      The awareness phase consists of defining the scope of the Year 2000
problem and establishing a corporate infrastructure and overall strategy to
perform compliance work. In the assessment phase, the Company attempts to
identify all hardware, software, networks, ATMs, other various processing
platforms and customer and vendor interdependencies affected by the Year 2000
problem. This assessment goes beyond information systems and includes equipment
and support systems that may be dependent on embedded microchips. The corrective
action phase involves code enhancements, hardware and software upgrades, system
replacements, vendor certification and other associated changes. The validation
phase involves the testing of incremental changes to hardware and software
components. In the implementation phase, systems are to be certified as Year
2000 compliant. For any systems that are not determined to be compliant, the
consequences must be assessed, and corrective actions or contingency plans put
into effect.

           Awareness Phase. The Company's Project2000 encompasses an overall
strategy to address Year 2000 problems. The Company's Project2000 focuses
chiefly upon the in-house, real-time, on-line systems, but also includes
assessing and assuring year 2000 compliance from third parties. Because of the
seriousness of the year 2000 issues, the Company appointed a Project2000
Coordinator and established a Project2000 team consisting of the Coordinator,
all officers of the Company and the Accounting Manager.

           To determine the size of the compliance project relating to internal
systems, the Company searched all of its production computer programs for
references to, and actions taken by reference to, the date (year in particular),
and compiled a list of those programs for evaluation for Project2000 issues. The
Company searched for date references that related to performing calculations or
that provided application program logic affecting the decision path of the
application, and date-driven calculations using "00" as an operand.

           The Company also identified all third parties whose ability to comply
with Year 2000 problems might affect the Company's operations, which include
product and service vendors and suppliers, including card issuers and other
real-time connections, and clients.


                                   Page - 13
<PAGE>


           The Company has completed the awareness phase.

           Assessment Phase. The assessment phase involves three components: (1)
determining Year 2000 compliance of the Company's internal systems used to
process data and to transfer data between its clients and third parties,
including the Company's computer switch, (2) determining Year 2000 compliance of
its individual ATMs and (3) determining Year 2000 compliance of third party
vendors and clients.

                Internal Systems. With respect to the Company's internal data
processing and transfer systems, in January 1985, as a result of incorrect
year-end date processing, the Company implemented a policy requiring all
production programs making date-related processing decisions to do so using
Julian dates. This form of date processing should not be sensitive to the
century rollover. Consequently, the Company's computer switch was developed
using a year 2000 compliant philosophy. The principal piece of equipment
comprising the computer switch is a Tandem computer. In 1997, the Company
entered into a lease for a new Tandem computer that the Company believes is Year
2000 compliant. The Company also believes that the operating software for the
new system is Year 2000 compliant. To assess its internal systems, the Company
evaluated all references to, and actions taken by reference to, the date (year
in particular), in its internal systems. The Company also examined systems and
equipment that may be dependent upon embedded microprocessors. The Company
concluded from the evaluation that its internal systems were Year 2000
compliant. In order to verify this conclusion, a comprehensive test was
completed on September 30, 1997 of all of the Company's critical applications.
Prior to cutting over from its old production system to its new production
system on that date, the Company had the opportunity to set the clock forward in
a controlled environment to test all internal systems and program functionality
with regard to the year 2000 rollover. The test revealed no Year 2000 problems.

                The Company believes its conclusion is supported by the fact
that the Company's system is not highly date-dependent. The Company processes
transactions in segments from 2:00 p.m. one day through 2:00 p.m. the next day.
Consequently, the Company believes that the window of risk for the Company's
internal systems from the year 2000 rollover should be limited to a maximum of
24 hours. Furthermore, the Company processes dates and makes all programmatic
date decisions based on a Julian representation of the date which should not be
vulnerable to the year 2000 rollover. The Company believes that its conclusion
is further supported by the fact that all of the application code was developed
in-house, all source code is intact and available, and the Company has the
in-house expertise to revise and maintain the software as needed for the year
2000 rollover.

                Individual ATMs. The Company has assessed whether its individual
ATMs are Year 2000 compliant and determined that as of February 28, 1999
approximately 70% of the Company's individual ATMs are Year 2000 compliant or
can be made Year 2000 compliant with the purchase of software upgrades from the
manufacturer.

                Third Party Compliance. The Company has attempted to obtain
initial certification from its "higher risk" vendors as to Year 2000 Compliance.
The Company has mailed questionnaires to these vendors to identify and, to the
extent possible, to resolve issues involving Year 2000 issues. Responses to
these questionnaires have been verified against information included with
current releases of vendors' products and services and on vendor web sites and
are shared with the Company's clients upon request. In addition, the Company has
engaged in joint testing with most of these vendors and service providers,
testing each party's


                                   Page - 14
<PAGE>


system and the interface between the systems. The Company believes that all
mission critical vendors and service providers have completed their internal
Year 2000 corrective actions. Service providers, vendors and suppliers whom the
Company deems "no risk" will not be contacted. The Company is also coordinating
with its clients regarding their activities related to the Year 2000 problem.
Most of the Company's clients maintain their own application programs, although
they utilize the Company's computer and network resources. The Company conducted
its own testing on the systems of its largest clients, and did not discover any
Year 2000 problems.

           The assessment phase is complete.

           Corrective Action Phase.  The corrective action phase
involves addressing compliance problems identified during the
assessment phase.

                Internal Systems. Because the assessment phase revealed no
material Year 2000 problems, the Company does not plan any system replacements,
code enhancements or hardware or software upgrades. However, the Company does
plan to implement "mature" releases of the Tandem operating system and to
monitor Tandem Year 2000 Compliance statements regarding such releases.

                Individual ATMs. With respect to those ATMs that can be made
Year 2000 compliant with the purchase of software upgrades from the
manufacturer, the Company expects to obtain software upgrades at no charge
because of the recent date of purchase of these ATMs. However, in the event the
Company must purchase ATM software upgrades, management estimates that the cost
should not exceed $50,000. With respect to the 30% of its ATMs that are not Year
2000 compliant and cannot be upgraded, the Company expects to replace
approximately half of these ATMs prior to the Year 2000 as part of an ongoing
program of replacing ATMs and other equipment for technology and maintenance
reasons. Some of these ATMs may be replaced with used Year 2000 compliant ATMs
to minimize cost. The balance of the ATMs that are not Year 2000 compliant are
located in marginally profitable locations, will not be replaced and will be
phased out.

                Third Party Compliance. Because no material Year 2000 problems
have been discovered to date, the Company does not currently plan any corrective
action with respect to service providers, vendors, suppliers and clients.

           The corrective action phase has been completed as to the Company's
internal systems and third party vendors, although as described below, the
Company intends to continue testing in these areas. The corrective action phase
with respect to individual ATMs will be completed prior to the Year 2000 when
all replacement or upgraded ATMs are expected to be in operation.

           Validation Phase. During the validation phase, the Company will
continue to test its internal systems, test its new and upgraded ATMs for Year
2000 compliance and engage in further testing with certain third parties.

                Internal Systems.  The Company will test and
validate all incremental changes to hardware, software, and
connections with other systems as those changes (or additions)
occur in the ordinary course of business prior to Year 2000.  All
users of the


                                   Page - 15
<PAGE>


Company's products and services have been asked to validate the Company's Year
2000 compliance. All such testing should be complete by August 31, 1999.

                Individual ATMs. Year 2000 compliance of all replacement and
upgraded ATMs will be tested prior to or at the time such ATMs are brought on
line.

                Third Party Compliance. During the first half of 1999, the
Company intends to review and possibly "re-validate" certifications from outside
service providers, vendors, and suppliers for compliance and will request each
to provide quarterly statements of compliance through the end of 1999.

           The validation phase will be completed at the times described above.

           Implementation Phase. The Company plans a final full internal system
test on or about September 1, 1999. Any resulting component failure (internal
and external) will be resolved to the Company's satisfaction prior to December
30, 1999, or the component will be (1) eliminated or replaced or (2) suspended
from production on December 30, 1999 and implemented after January 1, 2000 and
after re-certification.

      Regulatory and Independent Assessment. In addition to developing an
internal risk assessment methodology with respect to Year 2000 issues, the
Company is subject to external examinations and project reviews by regulatory
agencies and governmental bodies of the federal government. To date, these
examinations have not identified any material issues regarding the Company's
Year 2000 compliance efforts.

      At this time, the Company does not anticipate obtaining verification or
validation by independent third parties to assess Year 2000 risk. The Company's
Project2000 team continues to review the Company's readiness for the Year 2000.

      Year 2000 Compliance of Support Systems. In addition to computers and
related systems, the operation of office and facilities equipment, such as fax
machines, photocopiers, security systems, air conditioning, fire systems and
other common devices may be affected by Year 2000 problems. The Company does not
expect to devote substantial resources or time to evaluating potential Year 2000
problems with respect to these systems, other than contacting the manufacturer
or provider of these systems to determine Year 2000 compliance and taking or
arranging for appropriate corrective action.

      Costs of Year 2000 Compliance. The principal cost incurred by the Company
in connection with Project2000 will be the cost of replacing obsolete ATM
equipment as part of the Company's ongoing process of upgrading and modernizing
its ATMs. As of April, 1999, approximately 70 NCR model 1773 ATMs currently in
operation are not and will not be made Year 2000 compliant. These ATMs are
predominately in low volume sites, many of which do not support the expense of
replacement with new equipment. The Company expects to simply pull out of the
lowest tier of these sites, replace the medium volume sites with low cost
pre-owned equipment, and replace the highest volume sites with new and higher
end pre-owned equipment. The expected total cost of this project is
approximately $400,000 and the expected cost in fiscal year 2000 (prior to
December 31, 1999) is approximately $225,000.

      The Company has not identified any other significant costs directly
relating to the Year 2000 problem. The cost of compliance testing of external
client systems is billed to the


                                   Page - 16
<PAGE>


Company clients. Testing and repair, and the day-to-day burden of Project2000
has consumed incremental overhead of managers and executive officers of the
Company. Such overhead has been effectively absorbed with no material effect on
budgets and operations.

      Possible Consequences of Year 2000 Problems. It is not possible to predict
with any certainty the extent and nature of Year 2000 problems that the Company
may encounter. Management believes that the following are possible consequences
of Year 2000 problems that could arise:

o       operational inconveniences and inefficiencies for the Company and its
        clients which will divert management's time and attention and financial
        and human resources from ordinary business activities;

o       serious system failures that will cause material business disruptions or
        require significant efforts by the Company or its clients to prevent or
        alleviate material business disruptions;

o       routine business disputes and claims for pricing adjustments or
        penalties due to Year 2000 Problems incurred by clients, which would be
        resolved in the ordinary course of business; and

o       serious business disputes alleging that the Company failed to comply
        with the terms of contracts or industry standards of performance, some
        of which could result in litigation or contract termination.

      Contingency Plans. The Company has developed department-by-department
contingency plans to be implemented if its efforts to identify and correct Year
2000 Problems affecting its internal systems are not effective. Depending upon
the systems affected, these plans include accelerated replacement of affected
equipment or software; short- to medium-term use of backup sites, equipment, and
software, increased work hours for Company personnel; and similar approaches.

      Disclaimer. Management of the Company believes that it is not possible to
determine with complete certainty that all Year 2000 problems affecting the
Company or its clients have been or will be identified or corrected. The number
of devices that could be affected and the interactions among these devices are
simply too numerous. In addition, no one can accurately predict how many Year
2000-related failures will occur or the severity, duration, or financial
consequences of any such failure.

      The Company's policy is not to acquire hardware, software or other
technology that is not contractually represented by the vendor as Year 2000
compliant. However, the Company cannot be sure that all of these products are in
fact Year 2000 compliant. In addition, although the Company does not have any
contractual responsibility to ensure that its clients' application programs are
compliant, if its clients experience Year 2000 problems with such applications,
such clients may reduce or cease use of the Company's products and computing
resources. The successful operation of the Company's data processing and
transfer systems is dependent upon the proper functioning of the systems of
third parties that utilize the Company's services. Any failure of third parties
to resolve Year 2000 problems in a timely manner could materially adversely
affect the Company's operations.


                                   Page - 17
<PAGE>


      There can be no assurance that the Company will identify and resolve all
Year 2000 issues in a timely manner. Any failure by the Company to adequately
resolve all Year 2000 issues could have a material adverse effect on the
Company's business, financial condition, and results of operation.

      Forward-Looking Statements. Many of the statements contained in this
discussion of Year 2000 issues are "forward-looking statements." These
statements are not guarantees of future performance or results. They involve
risks, uncertainties and assumptions. Consequently, actual results may differ
materially from those discussed in these forward-looking statements. See Item 6
"Management's Discussion and Analysis OR PLAN OF OPERATION - Cautionary
Statement Concerning Forward-Looking Statements" for additional information and
factors to be considered with respect to forward-looking statements.

Future Changes in Accounting Principles

      In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of
an Enterprise and Related Information." This Statement establishes standards for
reporting information about operating segments in annual financial statements of
public business enterprises and requires disclosure of selected information
about operating segments in interim financial reports. The Statement is
effective for financial statements for periods beginning after December 15,
1997. Management has elected to first apply this standard in the Company's 1999
fiscal year-end reporting and believes that the adoption of this Statement will
not have a material effect on the Company's financial reporting.

Cautionary Statement Concerning Forward-Looking Statements

      Certain statements contained in this Quarterly Report on Form 10-QSB that
are not statements of historical fact constitute "forward-looking statements"
within the meaning of Section 21E of the Exchange Act. These statements are
subject to risks and uncertainties, as described below.

      Examples of forward-looking statements include, but are not limited to:
(i) projections of revenues, income or loss, earnings or loss per share, capital
expenditures, the payment or non-payment of dividends, capital structure and
other financial items, (ii) statements of plans and objectives of the Company or
its management or Board of Directors, including plans or objectives relating to
the products or services of the Company, (iii) statements of future economic
performance, and (iv) statements of assumptions underlying the statements
described in (i), (ii) and (iii). Forward-looking statements can often be
identified by the use of forward-looking terminology, such as "believes,"
"expects," "may," "will," "should," "could," "intends," "plans," "estimates" or
"anticipates," variations thereof or similar expressions.

      Forward-looking statements are not guarantees of future performance or
results. They involve risks, uncertainties and assumptions. The Company's future
results of operations, financial condition and business operations may differ
materially from those expressed in these forward-looking statements. Investors
are cautioned not to put undue reliance on any forward-looking statement.

      There are a number of factors that could cause actual results to differ
materially from those discussed in the forward-looking statements, including
those factors described below. Other factors not identified herein could also
have such an effect. Among the factors that could


                                   Page - 18
<PAGE>


cause actual results to differ materially from those discussed in the
forward-looking statements are the following:

o       Changes in laws or card association rules affecting the Company's
        ability to impose surcharge fees, and continued customer willingness to
        pay surcharge fees;

o       The ability of the Company to form new strategic relationships and
        maintain existing relationships with issuers of credit cards and
        national and regional card organizations;

o       The ability of the Company to expand its ATM base and
        transaction processing business;

o       The availability of financing at reasonable rates for vault cash and for
        other corporate purposes, including funding the Company's expansion
        plans;

o       The ability of the Company to maintain its existing relationships with
        two operators of combination convenience stores and gas stations at
        which the Company maintains 44 and 34 ATMs, respectively, as of January
        31, 1998;

o       The ability of the Company to keep its ATMs at other existing locations
        at reasonable rental rates and to place additional ATMs in preferred
        locations at reasonable rental rates;

o       The extent and nature of competition from financial institutions, credit
        card processors and third party operators, many of whom have
        substantially greater resources than the Company;

o       The ability of the Company to maintain its ATMs and information systems
        technology without significant system failures or breakdowns;

o       The ability of the Company to cause its ATMs and information systems to
        be Year 2000 compliant and the extent to which the systems of card
        issuers, card organizations, banks and other companies on which the
        Company's systems rely are Year 2000 compliant;

o       The extent of losses from errors and omissions, employee dishonesty and
        vault cash losses, for which the Company does not maintain insurance;

o       The ability of the Company to develop new products and enhance existing
        products to be offered through ATMs, and the ability of the Company to
        successfully market these products;

o       The ability of the Company to identify suitable acquisition candidates,
        to finance and complete acquisitions and to successfully integrate
        acquired assets and businesses into existing operations;

o       The ability of the Company to retain senior management and
        other key personnel;

o       Changes in general economic conditions.


                                   Page - 19
<PAGE>


Any forward-looking statement contained herein is made as of the date of this
document. The Company does not undertake to publicly update or correct any of
these forward-looking statements in the future.

                    PART II - OTHER INFORMATION


Item - 6   Exhibits and Reports on Form 8-K.

      (a)  Exhibits
           --------

           The exhibits required by this item are listed in the Index to
Exhibits set forth at the end of this Form 10-QSB.


      (b)  Reports on Form 8-K
           -------------------

           The Company did not file any reports on Form 8-K during the quarter
ended July 31, 1998.




                                   Page - 20
<PAGE>



                            SIGNATURES


      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                               UNIVERSAL MONEY CENTERS, INC.
                                  (Registrant)


Date: April 28, 1999           By: /s/ David S. Bonsal             
                                   --------------------------------
                                   David S. Bonsal
                                   Chairman of the Board
                                   and Chief Executive Officer



Date: April 28, 1999           By: /s/ Dave A. Windhorst           
                                   --------------------------------
                                   Dave A. Windhorst
                                   President
                                   (Principal Financial and Accounting Officer)



                                   Page - 21
<PAGE>



                                INDEX TO EXHIBITS

Exhibit
Number                         Description
------                         -----------


3.1*            Articles of Incorporation of the Company, as amended

3.2*            Amended and Restated Bylaws of the Company

4.1*            Promissory Note dated June 3, 1996 issued by the
                Company to Bank  21 (formerly The Farmers Bank)

4.2*            Business Loan Agreement dated June 3, 1996
                between the Company and Bank 21 (formerly
                The Farmers State Bank)

4.3*            Promissory Note dated August 26, 1996
                issued by the Company to Bank 21 (formerly
                The Farmers State Bank)

4.4*            Business Loan Agreement dated August 26,
                1996 between the Company and Bank 21
                (formerly The Farmers State Bank)

4.5*            Commercial Security Agreement dated August
                26, 1996 between the Company and Bank 21
                (formerly The Farmers State Bank)

4.6**           Promissory Note dated April 9, 1998 issued
                by the Company to Bank 21 (formerly The
                Farmers Bank)

4.7**           Negative Pledge Agreement dated April 9,
                1998 between the Company and Bank 21
                (formerly The Farmers State Bank)

4.8**           Commercial Security Agreement dated April
                9, 1998 between the Company and Bank 21
                (formerly The Farmers State Bank)

10.1*           Agreement dated August 15, 1989 among the Company,
                Funding, David S. Bonsal, John L. Settles and
                William Smithson

10.2*           Addendum dated August 29, 1989 among the Company,
                Funding, David S. Bonsal, John L. Settles and
                William Smithson

10.3*           Letter Agreement dated June 12, 1997 between the
                Company and Funding

10.4*           Master Equipment Lease Agreement dated October 18,
                1996 between the Company and Newcourt
                Communications Finance Corporation  (formerly AT&T
                Credit Corporation)


                                   Page - 22
<PAGE>

10.5*           Master Equipment Lease Agreement Schedule dated December 30,
                1996, between the Company and Newcourt
                Communications Finance Corporation (formerly AT&T
                Credit Corporation), as amended

10.6*           Master Equipment Lease Agreement Schedule dated October 30,
                1996, between the Company and Newcourt
                Communications Finance Corporation (formerly AT&T
                Credit Corporation)

10.7*           Master Equipment Lease Agreement Schedule dated February 28,
                1997, between the Company and Newcourt
                Communications Finance Corporation (formerly AT&T
                Credit Corporation)

10.8**          Master Lease Agreement dated February 28, 1998
                between the Company and Diebold Credit Corporation

10.9**          Lease Schedule dated April 20, 1998 between the
                Company and Diebold Credit Corporation

27              Financial Data Schedule



* Incorporated by reference from the exhibit to the registrant's Annual Report
on Form 10-KSB for the fiscal year ended January 31, 1998 which bears the same
exhibit number.

** Incorporated by reference from the exhibit to the registrant's Quarterly
Report on Form 10-QSB for the quarter ended April 30, 1998 which bears the same
exhibit number.


                                   Page - 23