<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-Q/A-1


(Mark One)
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001

                                       OR

[ ]   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 0-30791

                               eFunds Corporation
             (Exact name of registrant as specified in its charter)

               Delaware                                   39-1506286
    (State or other jurisdiction of         (IRS Employer Identification Number)
     incorporation or organization)

 7272 East Indian School Road, Suite 420
           Scottsdale, Arizona                              85251
(Address of principal executive offices)                  (Zip Code)

        Registrant's telephone number, including area code: 602-659-2135


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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  X    No
    ---      ---

The number of shares outstanding of the registrant's common stock, par value
$.01 per share, at August 10, 2001 was 46,254,356.

This Form 10-Q/A-1 is filed to amend the Form 10-Q for June 30, 2001 to
include restated financial statements as discussed in note 12 to the
consolidated financial statements.
<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

                       EFUNDS CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 June 30,      December 31,
(dollars in thousand)                                                             2001               2000
                                                                               (unaudited)
                                                                                ---------      -----------
                                                                                (restated
                                                                                 See note 12)
<S>                                                                             <C>            <C>
Current Assets
  Cash and cash equivalents ..............................................      $  80,320       $  78,731
  Time deposit subject to compensating balance arrangement ...............          1,500          10,000
  Restricted custodial cash ..............................................          5,355           3,787
  Accounts receivable - net ..............................................         79,376          57,825
  Deferred income taxes ..................................................         12,589          12,589
  Prepaid expenses and other current assets ..............................          9,567           7,111
                                                                                ---------       ---------
    Total current assets .................................................        188,707         170,043
                                                                                ---------       ---------
Property and equipment - net .............................................         72,913          77,355
Long-term investments ....................................................         19,092          18,500
Restricted cash ..........................................................         21,696          27,734
Intangibles
  Goodwill - net .........................................................         41,066          43,019
  Software - net .........................................................         34,970          33,150
  Other intangible assets - net ..........................................         13,879          15,004
                                                                                ---------       ---------
    Total intangibles - net ..............................................         89,915          91,173
                                                                                ---------       ---------
Other non-current assets .................................................          7,390           3,302
                                                                                ---------       ---------
        Total non-current assets .........................................        211,006         218,064
                                                                                ---------       ---------
         Total assets ....................................................      $ 399,713       $ 388,107
                                                                                =========       =========
Current Liabilities
  Accounts payable .......................................................      $  24,372       $  29,163
  Accrued liabilities
    Accrued compensation and employee benefits ...........................         13,700          18,703
    Accrued contract losses ..............................................         19,828          22,247
    Other ................................................................         31,683          20,953
  Borrowings on line of credit ...........................................           --             5,303
  Long-term debt due within one year .....................................          2,280           2,100
                                                                                ---------       ---------
    Total current liabilities ............................................         91,863          98,469
Long-term debt ...........................................................            896           2,244
Other long-term liabilities ..............................................            100              74
Commitments and contingencies (Notes 4, 5, 7 and 11)
Stockholders' equity
  Preferred stock $.01 par value; 100,000,000 shares authorized; no shares
    issued and outstanding ...............................................           --              --
  Common stock $.01 par value (authorized: 250,000,000 shares; issued and
    outstanding: 46,128,208 shares at June 30, 2001 and 45,500,000 at
     December 31, 2000) ..................................................            461             455
  Additional paid-in capital .............................................        399,778         391,699
  Accumulated deficit ....................................................        (91,413)       (103,233)
  Accumulated other comprehensive loss ...................................         (1,972)         (1,601)
                                                                                ---------       ---------
    Stockholders' equity .................................................        306,854         287,320
                                                                                ---------       ---------
      Total liabilities and stockholders' equity .........................      $ 399,713       $ 388,107
                                                                                =========       =========
</TABLE>

See Notes to Unaudited Consolidated Financial Statements



                                       2
<PAGE>
                       EFUNDS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                       Quarter Ended June 30,         Six Months Ended June 30,
                                                     --------------------------      --------------------------
(dollars and shares in thousands,
  except per share amounts)                             2001            2000            2001            2000
                                                     ----------      ----------      ----------      ----------
                                                     (restated                       (restated
                                                      See note 12)                    See note 12)
<S>                                                  <C>             <C>             <C>             <C>
Net Revenue ....................................     $  126,057      $  100,970      $  250,555      $  201,225
                                                     ----------      ----------      ----------      ----------
  Cost of revenue, excluding loss contract and
    asset impairment charges ...................         77,532          59,439         157,182         118,197
  Loss contract and asset impairment charges ...           --             9,700            --             9,700
                                                     ----------      ----------      ----------      ----------
    Total cost of revenue ......................         77,532          69,139         157,182         127,897
                                                     ----------      ----------      ----------      ----------
Gross Margin ...................................         48,525          31,831          93,373          73,328
                                                     ----------      ----------      ----------      ----------
  Selling, general and administrative expense ..         37,002          37,437          75,810          76,193
                                                     ----------      ----------      ----------      ----------
  Income (loss) from operations ................         11,523          (5,606)         17,563          (2,865)
Other Income (Expense)
  Interest expense .............................           (186)           (622)           (476)         (1,796)
  Interest and other income (expense) ..........            456            (360)          1,291              26
                                                     ----------      ----------      ----------      ----------
Income (loss) before income taxes ..............         11,793          (6,588)         18,378          (4,635)
Benefit (provision) for income taxes ...........         (4,055)          2,022          (6,557)          1,285
                                                     ----------      ----------      ----------      ----------
Net income (loss) ..............................     $    7,738      $   (4,566)     $   11,821      $   (3,350)
                                                     ==========      ==========      ==========      ==========
  Weighted average shares outstanding ..........         45,790          40,060          45,647          40,030
                                                     ==========      ==========      ==========      ==========
  Weighted average shares and potential dilutive
    shares outstanding .........................         48,216          40,060          47,341          40,030
                                                     ==========      ==========      ==========      ==========
Net income (loss) per share - basic ............     $     0.17      $    (0.11)     $     0.26      $    (0.08)
                                                     ==========      ==========      ==========      ==========
Net income (loss) per share - diluted ..........     $     0.16      $    (0.11)     $     0.25      $    (0.08)
                                                     ==========      ==========      ==========      ==========
</TABLE>

See Notes to Unaudited Consolidated Financial Statements


                                       3
<PAGE>
                       EFUNDS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                            Six Months Ended June 30,
                                                            ------------------------
 (dollars in thousands)                                        2001          2000
                                                             --------      --------
                                                            (restated
                                                               See
                                                             note 12)
<S>                                                         <C>            <C>
Cash Flows from Operating Activities
  Net income (loss) ....................................     $ 11,821      $ (3,350)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities
      Depreciation .....................................        9,133         5,767
      Amortization of intangibles ......................       10,941         7,665
      Loss on disposals of property and equipment ......          148            89
      Equity in earnings of investee ...................         (139)         --
      Deferred income taxes ............................           26        (3,400)
      Changes in assets and liabilities
         Restricted cash ...............................        4,469        (2,691)
         Accounts receivable ...........................      (21,550)       (7,383)
         Accounts payable ..............................       (4,793)        4,399
         Income taxes receivable/payable ...............        4,022         9,497
         Accrued contract losses .......................       (2,419)        7,134
         Other assets and liabilities ..................       (3,960)        3,161
                                                             --------      --------
            Net cash provided by operating activities ..        7,699        20,888
                                                             --------      --------
Cash Flows from Investing Activities
  Capital expenditures .................................      (14,308)      (16,023)
  Cash paid for investments ............................       (1,119)      (20,000)
  Other ................................................         --             546
                                                             --------      --------
            Net cash used in investing activities ......      (15,427)      (35,477)
                                                             --------      --------
Cash Flows from Financing Activities
  Net borrowings on line of credit .....................       (5,303)        5,041
  Proceeds from issuance of long-term debt .............         --            --
  Payments on long-term debt ...........................       (1,168)         (985)
  Release of loan guarantee collateral .................        8,500          --
  Proceeds from exercise of stock options ..............        7,288          --
  Proceeds from initial public offering ................         --          61,995
  Capital contributions by Deluxe ......................         --          23,905
  Dividends paid to Deluxe .............................         --         (13,800)
                                                             --------      --------
            Net cash provided by financing activities ..        9,317        76,156
                                                             --------      --------
Adjustment for lag in financial reporting (Note 9) .....         --          (4,127)

Net increase in cash and cash equivalents ..............        1,589        57,440
Cash and cash equivalents at beginning of period .......       78,731        35,849
                                                             --------      --------
Cash and cash equivalents at end of period .............     $ 80,320      $ 93,289
                                                             ========      ========
</TABLE>


See Notes to Unaudited Consolidated Financial Statements


                                       4
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.


      The consolidated balance sheet as of June 30, 2001, the consolidated
      statements of operations for the quarters and six month periods ended June
      30, 2001 and 2000 and the consolidated statements of cash flows for the
      six month periods ended June 30, 2001 and 2000 are unaudited. In the
      opinion of management, all adjustments necessary for a fair presentation
      of such financial statements are included. Other than those discussed in
      the notes below, such adjustments consist only of normal recurring items.
      Interim results are not necessarily indicative of results for a full year.
      The consolidated financial statements and notes are presented in
      accordance with instructions for Form 10-Q and do not contain certain
      information included in the Company's annual consolidated financial
      statements and notes. The consolidated financial statements and notes
      appearing in this report should be read in conjunction with the Company's
      audited consolidated financial statements and related notes included in
      the Company's Annual Report on Form 10-K for the year ended December 31,
      2000.

2.    The Company was incorporated in Delaware in December 1984 and changed its
      name from Deluxe Electronic Payment Systems, Inc. to eFunds Corporation in
      September 1999. The Company was formerly a wholly owned subsidiary of
      Deluxe Corporation (Deluxe). In January 2000, Deluxe announced that its
      board of directors had approved a plan to combine its electronic payments,
      risk management, professional services and government services businesses
      under the Company and to undertake a series of transactions designed to
      establish the Company as an independent, publicly traded company.

      The Company issued 5.5 million shares of common stock to the public in
      June 2000 (the IPO). Proceeds from the offering, based on the offering
      price of $13.00 per share, totaled $71.5 million ($64.5 million, net of
      offering expenses). Subsequent to the IPO, Deluxe continued to own 40
      million shares of the Company's common stock, representing 87.9% of the
      Company's total outstanding common shares.



                                       5
<PAGE>
      In October 2000, Deluxe announced that it planned to distribute all of the
      shares of the Company's common stock owned by it to its shareholders
      through a Spin-Off transaction (the Spin-Off). In November 2000, Deluxe
      declared a dividend of all the 40,000,000 common shares of the Company
      held by it. This dividend was distributed on December 29, 2000 in the
      amount of approximately 0.5514 of an eFunds share for each Deluxe share.
      Deluxe received a ruling from the Internal Revenue Service that the
      distribution qualified as tax-free to Deluxe and its shareholders for U.S.
      federal income tax purposes, except to the extent that cash was received
      in lieu of fractional shares.

      In connection with the IPO and the Spin-Off, the Company and Deluxe
      entered into various agreements that addressed the allocation of assets
      and liabilities between them and that defined their relationship after the
      separation. The agreements related to matters such as consummation of the
      IPO and the distribution of the Company's stock, registration rights for
      Deluxe, intercompany loans, information technology consulting, business
      process management services, indemnification, data sharing, real estate
      matters, tax sharing and transition services. For transition services, the
      Company and Deluxe compensated each other for providing services. The
      transition period varied depending on the agreement, but most transition
      services terminated following the Spin-Off.

      Deluxe has been, and is expected to continue to be, a significant client
      of the Company. Beginning in 2000, the Company's services to Deluxe were
      formalized into a five-year software development and outsourcing
      agreement. If Deluxe fails to spend a minimum of $43 million under this
      agreement in any year, it will be obligated to make payments for a portion
      of the Company's fees based on estimates of the Company's lost profits.
      This agreement also calls for the Company to provide business process
      management services, including accounts receivable, accounts payable and
      other general accounting and data entry services to Deluxe. Deluxe's
      annual minimum spending target for business process management services
      ranges from $8.1 million in 2000 to $4.2 million in 2004. The provision of
      services by the Company under this agreement is non-exclusive, and Deluxe
      may contract with any third party for the provision of professional
      services. Revenue from Deluxe for information technology and business
      process management services was $12.1 million and $14.8 million for the
      second quarters of 2001 and 2000, respectively, and $26.5 million and
      $30.4 million for the six-month periods ended June 30, 2001 and 2000,
      respectively.

      Deluxe contributed the ownership of various subsidiaries and certain
      assets and liabilities of business operations (the Transferred Businesses)
      to the Company on March 31, 2000. As the Company and the Transferred
      Businesses were under common control the accompanying consolidated
      financial statements have been retroactively restated to reflect the
      historical consolidated results of operations and cash flows through March
      31, 2000, as if the contribution of the Transferred Business described
      above had occurred and the Company and the Transferred Businesses had been
      operating as a stand-alone business throughout the periods presented on an
      "as-if-pooled" basis.

      The historical financial information the Company has included in the
      consolidated financial statements may not be reflective of what the
      results of operations, financial condition and cash flows would have been
      had the Company been a separate, stand-alone entity during all periods
      presented. As a result, historical financial information through the date
      of the Spin-Off may not necessarily be indicative of what the Company's
      results of operations, financial condition and cash flows will be in the
      future.

3.    The Company's total comprehensive income (loss) for the quarters ended
      June 30, 2001 and 2000 was $7.7 million and $(4.9) million, respectively.
      Total comprehensive income (loss) for the six months ended June 30, 2001
      and 2000 was $11.4 million and $(4.1), million respectively. The Company's
      total comprehensive income consists of net income and foreign currency
      translation adjustments.


                                       6
<PAGE>
4.    In March 2000, the Company paid cash of $20.0 million for an approximate
      24% interest in Access Cash International, L.L.C (ACI) a limited liability
      company that provides automated teller machine (ATM) management services.
      This investment was being accounted for under the equity method of
      accounting and was included in long-term investments in the Company's
      consolidated balance sheet as of June 30, 2001. The difference of $20
      million between the carrying value of the investment and the underlying
      equity in the net assets of ACI was being accounted for in the same manner
      as goodwill and was being amortized over 15 years and included in the
      Company's consolidated financial statements in interest and other income
      (expense) along with the Company's share of ACI's losses. The carrying
      value of this investment was approximately $18.0 million at June 30, 2001.

      The Company previously agreed to make up to $35 million of cash available
      for supplying ATMs managed by ACI and had supplied $21.7 million of cash
      for this purpose as of June 30, 2001. This cash is classified as long-term
      restricted cash in the accompanying balance sheet. The Company also agreed
      to guarantee up to $3.0 million (Canadian) face value of equipment leases
      for Canadian customers of ACI and had indicated that, subject to the
      mutual agreement of the parties upon definitive terms and conditions, it
      would be willing to work towards an arrangement under which the Company
      would loan ACI up to $12.0 million to enable it to undertake mutually
      agreed-upon acquisitions. No such loans or lease guarantees were provided
      through June 30, 2001.

      In September 2000, the Company entered into an ATM deployment and
      management agreement with ACI under which the Company received fees paid
      by customers utilizing ATMs deployed by it and interchange fees from their
      banks. ACI managed this network of ATMs in exchange for a management fee
      determined by reference to the number of ATMs deployed. The Company and
      ACI entered into an agreement dated June 29, 2001 (Amendment Agreement),
      to amend the ATM deployment and management agreement whereby ACI agreed to
      assign its revenue from equipment sales and maintenance during the second
      quarter of 2001 to the Company in order to settle various disputes that
      had arisen regarding ACI's performance under the ATM deployment and
      management agreement.

      The Amendment Agreement also amended the ATM deployment and management
      agreement so that, commencing in July 2001, the Company assumed the
      responsibility for future ATM equipment sales and related maintenance and
      agreed to pay ACI a fixed monthly fee of $0.7 million to support these
      activities. The Company retained the right to cancel this feature of the
      Amendment Agreement if the equipment sales and maintenance revenues did
      not exceed $0.6 million per month. The Amendment Agreement also provided
      that the Company would pay ACI an additional $0.25 million per month under
      the ATM deployment and management agreement to provide further incentives
      to ACI to support the Company's sales efforts and to defray the cost to
      ACI of doing so. The Amendment Agreement also extended the minimum term of
      the ATM deployment and management agreement through March 31, 2002.

      The Company and the then majority owner of ACI also entered into an
      agreement, dated July 2, 2001 (Letter Agreement) acknowledging their
      mutual desire to pursue a transaction by which the Company would acquire
      the remaining 76% of ACI. The Letter Agreement required the Company to pay
      $150,000 to the other owners of ACI if the Company had not acquired the
      remaining equity interests in ACI by July 31, 2001, with additional
      payments becoming due if the Company had not acquired the remaining equity
      interests in ACI by subsequent milestone dates through March 31, 2002. In
      addition, the Letter Agreement required the Company to pay the other
      owners of ACI $200,000 in exchange for their agreement not to pursue other
      potential purchasers of their equity interests in ACI.

      The Company has determined that ACI's agreement to the Amendment Agreement
      was dependent on the Company's agreement to the Letter Agreement. As a
      result, management has concluded that these agreements are inter-dependent
      and, in substance are one agreement effective in July 2002, and that the
      various elements of the two agreements can not be economically separated
      so as to support accounting for each element independently. Therefore, the
      payments among the Company, ACI and the owner of the remaining equity
      interests of ACI in accordance with these two agreements are being
      accounted for as advances and repayments, with the net amount to become an
      increase or decrease in the purchase price for the Company's acquisition
      of the remaining equity interests in ACI.

                                       7

<PAGE>
5.    The Company has incurred significant losses relating to its government
      services business in prior periods. A roll-forward of the Company's loss
      reserve for losses on government services contracts is as follows:

<TABLE>
<CAPTION>
      (dollars in thousands):                           2001            2000
                                                      --------        --------
<S>                                                   <C>             <C>
      Balance, beginning of year ..............       $ 22,247        $ 20,599
      Provision for contract losses ...........           --              --
      Reversal of provision for contract losses           --              --
      Charges to reserve ......................           (785)         (1,057)
                                                      --------        --------
      Balance at March 31 .....................       $ 21,462        $ 19,542
      Provision for contract losses ...........           --            12,200
      Reversal of provision for contract losses           --            (2,500)
      Charges to reserve ......................         (1,634)         (1,508)
                                                      --------        --------
      Balance at June 30 ......................       $ 19,828        $ 27,734
                                                      ========        ========
</TABLE>

      Deluxe has agreed to indemnify the Company for certain future losses
      arising from litigation based on the conduct of the government services
      business prior to the IPO as well as incremental future losses on
      contracts of the government services segment which were in a loss position
      at April 30, 2000. The Company plans to record any amounts received from
      Deluxe under the indemnification agreement as a reduction of expense when,
      and if, any additional contract or litigation losses are recognized.
      Deluxe's total indemnification obligations to the Company are limited to
      $14.6 million. No such indemnification obligations have arisen through
      June 30, 2001.

6.    The Company's consolidated balance sheets reflect restructuring accruals
      of $3.1 million and $0.4 million as of June 30, 2001 and December 31,
      2000, respectively, for employee severance and other costs. During the
      first quarter of 2001, restructuring accruals of $3.2 million were
      recorded relating to the planned closure of the Company's operations in
      Bothell, Washington. These new restructuring charges are reflected in
      selling, general and administrative (SG&A) expenses in the consolidated
      statement of operations.


                                       8
<PAGE>
      The following table summarizes the change in the Company's restructuring
      accruals for the six months ended June 30, 2001:

<TABLE>
<CAPTION>
                                          Number
                                       of employees
      (dollars in thousands):            affected        Amount
                                       ------------     --------
<S>                                    <C>              <C>
      Balance, December 31, 2000              9         $   378
      Severance paid ............            (7)           (177)
      Adjustments ...............            --             (40)
      Provision for restructuring           224           3,200
                                       ------------     -------
      Balance, March 31, 2001 ...           226         $ 3,361
      Severance paid ............            (2)           (144)
      Adjustments ...............            (1)           (100)
      Provision for restructuring            --              --
                                       ------------     -------
      Balance, June 30, 2001 ....           223         $ 3,117
                                       ============     =======
</TABLE>

7.    On December 29, 2000, the Company secured a $15.0 million revolving credit
      facility with a term of nine months. Each borrowing thereunder will bear
      interest at either the lender's base or offshore rate at the Company's
      discretion. Although the Company has not borrowed any funds under this
      facility through June 30, 2001, it has posted an irrevocable standby
      letter of credit in the amount of $4.0 million to guarantee its
      performance under a government services contract with the state of New
      York. The issuance of this letter of credit reduced the Company's
      borrowing capacity under the facility to $11.0 million. The facility is
      guaranteed by certain of the Company's subsidiaries and requires the
      Company to comply with certain financial and non-financial covenants. The
      Company is currently in compliance with all of these requirements.

      As of June 30, 2001, the Company's India operations had a $10.0 million
      credit facility, denominated in Indian rupees, available at the lender's
      prime interest rate. Borrowings under this facility are due on demand. In
      March 2001, the Company repaid the outstanding balance of this facility
      and $8.5 million of a $10.0 million time deposit account maintained by the
      Company to support its guaranty was returned to the Company. The average
      amount drawn on this credit facility during the first quarter of 2001 was
      $5.3 million at a weighted average interest rate of 15.5%. The Company did
      not borrow against this credit facility during the second quarter of 2001.
      The average amount drawn on this line during 2000 was $4.5 million at a
      weighted average interest rate of 15.4%.

      The Company also issues letters of credit in the ordinary course of
      business under its India facility. At June 30, 2001 the aggregate value of
      outstanding letters of credit amounted to $0.7 million. These letters of
      credit are collateralized by the remaining $1.5 million of the $10.0
      million time deposit account maintained with the issuer.

8.    The Company has organized its business units into two operating segments
      based on the nature of the customers served by each segment. These
      segments are payment systems and services and government services. The
      payment systems and services segment provides the financial services and
      retail industries with a comprehensive suite of payment management and
      decision support products as well as information technology consulting,
      software development and business process outsourcing services. The
      government services segment provides online electronic benefit transfer
      (EBT) services under entitlement programs on behalf of state and local
      governments and Medicaid eligibility verification services. The Company
      previously organized its business units into three segments. Prior periods
      have been restated to conform to the current period presentation.


                                       9
<PAGE>
      The Company's segments operate primarily in the United States. The payment
      systems and services segment also has international operations. No single
      customer of the Company other than Deluxe accounted for more than 10% of
      total net revenues for the six months ended June 30, 2001 and 2000. Deluxe
      accounted for 10.6% and 15.1% of the Company's total net revenues in those
      periods, respectively.

      The accounting policies of the segments are the same as those described in
      Note 2 to the Company's audited consolidated financial statements included
      in the Company's Annual Report on Form 10-K. In evaluating segment
      performance, management focuses on operating income. The operating income
      measurement utilized by management excludes special charges (e.g.,
      restructuring charges, asset impairment charges, certain one-time charges
      that management believes are not reflective of on-going operations, etc.).
      Special charges in the first quarter of 2001 consisted of $3.2 million
      related to the closure of the Company's operations in Bothell, Washington.
      These costs were recorded in selling, general and administrative expense
      in the payment systems and services segment. Special charges in the second
      quarter of 2000 consisted of $9.7 million for losses on certain EBT
      contracts and $2.9 million for costs related to the Company's separation
      from Deluxe. The losses on the EBT contracts were charged to cost of
      revenue in the government services segment. The costs related to the
      separation from Deluxe were charged to general and administrative expenses
      in the payment systems and services segment.


<TABLE>
<CAPTION>
                                                              Quarter Ended June 30, 2001
                                                      -------------------------------------------
                                                        Payment
                                                      systems and     Government         Total
(dollars in thousands)                                  services       services      Consolidated
                                                      -----------     ----------     ------------
<S>                                                   <C>             <C>            <C>
Total net revenues ..............................       $114,979       $ 11,078        $ 126,057
Gross margin excluding special charges ..........         44,636          3,889           48,525
Operating income excluding special charges ......          8,519          3,004           11,523
Special charges .................................           --             --               --
Gross margin including special charges ..........         44,636          3,889           48,525
Operating income  including special charges .....          8,519          3,004           11,523
Depreciation and amortization expense ...........         10,284           --             10,284
Segment assets ..................................        378,978         20,735          399,713
Capital purchases ...............................          5,230           --              5,230
</TABLE>

<TABLE>
<CAPTION>
                                                              Quarter Ended June 30, 2000
                                                      -------------------------------------------
                                                        Payment
                                                      systems and     Government         Total
(dollars in thousands)                                  services       services      Consolidated
                                                      -----------     ----------     ------------
<S>                                                   <C>             <C>            <C>
Total net revenues ..............................       $ 89,983       $ 10,987        $ 100,970
Gross margin excluding special charges ..........         38,353          3,178           41,531
Operating income excluding special charges ......          5,140          1,829            6,969
Special charges .................................          2,875          9,700           12,575
Gross margin including special charges ..........         38,353         (6,522)          31,831
Operating income (loss) including special charges          2,265         (7,871)          (5,606)
Depreciation and amortization expense ...........          6,893           --              6,893
Segment assets ..................................        367,950         26,354          394,304
Capital purchases ...............................          7,226           --              7,226
</TABLE>



                                       10
<PAGE>
<TABLE>
<CAPTION>
                                                            Six Months Ended June 30, 2001
                                                      -------------------------------------------
                                                        Payment
                                                      systems and     Government         Total
(dollars in thousands)                                  services       services      Consolidated
                                                      -----------     ----------     ------------
<S>                                                   <C>             <C>            <C>
Total net revenues ..............................       $228,743       $ 21,812        $ 250,555
Gross margin excluding special charges ..........         85,621          7,752           93,373
Operating income excluding special charges ......         14,744          6,019           20,763
Special charges .................................          3,200           --              3,200
Gross margin including special charges ..........         85,621          7,752           93,373
Operating income including special charges ......         11,544          6,019           17,563
Depreciation and amortization expense ...........         20,074           --             20,074
Capital purchases ...............................         14,308           --             14,308
</TABLE>

<TABLE>
<CAPTION>
                                                              Six Months Ended June 30, 2000
                                                      -------------------------------------------
                                                        Payment
                                                      systems and     Government         Total
(dollars in thousands)                                  services       services      Consolidated
                                                      -----------     ----------     ------------
<S>                                                   <C>             <C>            <C>
Total net revenues ..............................       $178,448       $ 22,777        $ 201,225
Gross margin excluding special charges ..........         76,267          6,761           83,028
Operating income excluding special charges ......          5,846          3,864            9,710
Special charges .................................          2,875          9,700           12,575
Gross margin including special charges ..........         76,267         (2,939)          73,328
Operating income (loss) including special charges          2,971         (5,836)          (2,865)
Depreciation and amortization expense ...........         13,432           --             13,432
Capital purchases ...............................         16,023           --             16,023
</TABLE>


Revenues are attributed to geographic areas based on the location of the assets
and employees producing the revenues. The Company's operations by geographic
area are as follows (in thousands):

<TABLE>
<CAPTION>
                    Total Net Sales to External Customers       Property and Equipment
                 --------------------------------------------   ----------------------
                    Quarter Ended          Six Months Ended
                       June 30,                June 30,                June 30,
                 --------------------    --------------------    --------------------
                   2001        2000        2001        2000        2001        2000
                 --------    --------    --------    --------    --------    --------
<S>              <C>         <C>         <C>         <C>        <C>          <C>
United
  States ....    $116,099    $ 94,366    $229,950    $188,524    $ 63,152    $ 62,837
United
  Kingdom ...       4,340       4,613       9,343       8,396       1,701       1,964
India .......       5,618       1,991      11,262       4,305       8,004       4,363
Other foreign
  countries .          --          --          --          --          56          31
                 --------    --------    --------    --------    --------    --------
Total .......    $126,057    $100,970    $250,555    $201,225    $ 72,913    $ 69,195
                 ========    ========    ========    ========    ========    ========
</TABLE>

9.    Effective January 1, 2000, the Company's Indian operations, which had
      previously reported their results of operations and financial position on
      a one-month lag, changed their reporting dates to coincide with the rest
      of the Company's subsidiaries. This change, which was made in conjunction
      with the implementation of the Company's central accounting and financial
      reporting system, reflects the financial results of those operations on a
      more timely basis and improves operating and planning efficiencies. The
      results of these Indian operations for the month of December 1999, which
      amounted to a net loss of $1.1 million, were excluded from the Company's
      consolidated statements of operations and were reflected as an adjustment
      to accumulated deficit during the first quarter of 2000.

10.   In June 1998, the Financial Accounting Standards Board (FASB) issued
      Statement of Financial Accounting Standards No. 133 Accounting for
      Derivative Instruments and Hedging Activities, which provides guidance on
      accounting for derivatives and hedge transactions. The statement was
      effective for the Company on January 1, 2001. The effects of this
      pronouncement did not have a material effect on reported operating results
      or financial position of the Company.


                                       11
<PAGE>
      In July 2001, the FASB issued Statement of Financial Accounting Standards
      No. 141, Business Combinations, which establishes new standards for
      accounting and reporting requirements for business combinations and will
      require that the purchase method of accounting be used for all business
      combinations initiated after June 30, 2001. Use of the
      pooling-of-interests method is prohibited. The Company does not believe
      that SFAS No. 141 will have a material impact on the Company's
      consolidated financial statements.

      In July 2001, the FASB issued Statement of Financial Accounting Standards
      No. 142, Goodwill and Other Intangible Assets that will become effective
      for the Company on January 1, 2002. SFAS 142 requires, among other things,
      the cessation of the amortization of goodwill. In addition, the standard
      includes provisions for the reclassification of certain existing
      recognized intangibles such as goodwill, reassessment of the useful lives
      of existing recognized intangibles, reclassification of certain
      intangibles out of previously reported goodwill and the identification of
      reporting units for purposes of assessing potential future impairments of
      goodwill. SFAS 142 also requires the Company to complete a transitional
      goodwill impairment test six months from the date of adoption. The Company
      is assessing the impact this new standard will have on its consolidated
      balance sheet and statement of operations. Goodwill amortization for the
      second quarter of 2001 and the first six months of 2001 amounted to
      approximately $1.0 million and $2.0 million, respectively.

11.   In connection with the Company's EBT and collection activities, the
      Company posts surety bonds with state agencies guaranteeing its
      performance of certain obligations related to contracts or state
      requirements. The aggregate amount of bonds outstanding for this purpose
      at June 30, 2001 was $9.0 million.

12.   Restatement/Subsequent events

      Subsequent to the issuance of the Company's consolidated financial
      statements as of and for the three and six months ended June 30, 2001,
      management determined that the payments made among the Company, ACI and
      the owner of the remaining equity interests in ACI in accordance with the
      Amendment Agreement and Letter Agreement discussed in Note 4 should be
      accounted for as advances and repayments, with the net amount to become an
      increase or decrease in the purchase price for the Company's acquisition
      of the remaining equity interests in ACI. Previously, the Company had
      recorded revenue of $2.1 million in the three months ended June 30, 2001,
      based on ACI's assignment in the Amendment Agreement of its equipment
      sales in the second quarter of 2001 to the Company to settle disputes
      related to an existing ATM deployment and management agreement.

      In February 2002, in response to questions raised by a former ACI employee
      regarding the accounting for the Amendment Agreement, the Company
      conducted a review which included a review of the accounting for the
      Amendment Agreement and the Letter Agreement. Based on the review,
      management has concluded that these two agreements are inter-dependent
      and, in substance are one agreement that became effective in July 2002,
      and that the various elements of the two agreements can not be
      economically separated so as to support accounting for each element
      independently. As a result, the payments among ACI, the Company and the
      owner of the remaining equity interests in ACI should be accounted for as
      advances and repayments rather than revenues and expenses with the net
      amount to become an increase or decrease in the purchase price for the
      Company's acquisition of the remaining equity interests in ACI.
      Accordingly, the accompanying consolidated financial statements have been
      restated from amounts previously reported to account for the transactions
      resulting from these two agreements as discussed above and in Note 4 and
      to record the appropriate related adjustments to the provision for income
      taxes and the Company's equity in the earnings of ACI. The following
      summarizes the significant effects of the restatement on the accompanying
      financial statements:

                                       12


<PAGE>
<TABLE>
<CAPTION>
                                            June 30, 2001
                                     ---------------------------
                                     As Previously        As
(dollars in thousands)                 Reported        Restated
                                     -------------    ----------
<S>                                  <C>              <C>
Cash and cash equivalents .......      $ 80,320        $ 80,320
Accounts receivable, net ........        81,518          79,376
Total current assets ............       190,849         188,707
Long-term investments ...........        18,578          19,092
Total non-current assets ........       210,492         211,006
Total assets ....................       401,341         399,713

Accrued other liabilities .......        32,328          31,683
Total current liabilities .......        92,508          91,863
Stockholders' equity ............      $307,837        $306,854
</TABLE>

<TABLE>
<CAPTION>
                                                                                       Quarter ended June 30, 2001
                                                                                      -----------------------------
                                                                                      As Previously          As
(dollars and shares in thousands except per share  amounts)                              Reported         Restated
                                                                                      -------------      ----------
<S>                                                                                   <C>                <C>
Net Revenue .....................................................................       $  128,199       $  126,057
                                                                                        ----------       ----------
  Cost of revenue, excluding loss contract and asset impairment charges (credits)           77,532           77,532
  Loss contract and asset impairment charges (credits) ..........................             --               --
                                                                                        ----------       ----------
  Total cost of revenue .........................................................           77,532           77,532
                                                                                        ----------       ----------
Gross Margin ....................................................................           50,667           48,525
  Selling, general and administrative expense ...................................           37,002           37,002
                                                                                        ----------       ----------
  Income from operations ........................................................           13,665           11,523
Other Income (Expense)
  Interest expense ..............................................................             (186)            (186)
  Interest and other income (expense) ...........................................              (58)             456
                                                                                        ----------       ----------
Income before income taxes ......................................................           13,421           11,793
Provision for income taxes ......................................................           (4,700)          (4,055)
                                                                                        ----------       ----------
Net income ......................................................................       $    8,721       $    7,738
                                                                                        ==========       ==========

Weighted average shares:
  Basic .........................................................................           45,790           45,790
                                                                                        ==========       ==========
  Diluted .......................................................................           48,216           48,216
                                                                                        ==========       ==========

Earnings per share
  Basic .........................................................................       $     0.19       $     0.17
                                                                                        ==========       ==========
  Diluted .......................................................................       $     0.18       $     0.16
                                                                                        ==========       ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                                      Six months ended June 30, 2001
                                                                                      ------------------------------
                                                                                      As Previously           As
(dollars and shares in thousands except per share amounts)                               Reported          Restated
                                                                                      -------------       ----------
<S>                                                                                   <C>                 <C>
Net Revenue .....................................................................       $  252,697        $  250,555
                                                                                        ----------        ----------
  Cost of revenue, excluding loss contract and asset impairment charges (credits)          157,182           157,182
  Loss contract and asset impairment charges (credits) ..........................             --                --
                                                                                        ----------        ----------
  Total cost of revenue .........................................................          157,182           157,182
                                                                                        ----------        ----------
Gross Margin ....................................................................           95,515            93,373
                                                                                        ----------        ----------
  Selling, general and administrative expense ...................................           75,810            75,810
                                                                                        ----------        ----------
  Income from operations ........................................................           19,705            17,563
Other Income (Expense)
  Interest expense ..............................................................             (497)             (476)
  Interest and other income (expense) ...........................................              797             1,291
                                                                                        ----------        ----------
Income before income taxes ......................................................           20,005            18,378
Provision for income taxes ......................................................           (7,202)           (6,557)
                                                                                        ----------        ----------
Net income ......................................................................       $   12,803        $   11,821
                                                                                        ==========        ==========
Weighted average shares:
  Basic .........................................................................           45,647            45,647
                                                                                        ==========        ==========
  Diluted .......................................................................           47,341            47,341
                                                                                        ==========        ==========

Earnings per share
  Basic .........................................................................       $     0.28        $     0.26
                                                                                        ==========        ==========
  Diluted .......................................................................       $     0.27        $     0.25
                                                                                        ==========        ==========
</TABLE>

The Company and ACI's other owners entered into a definitive purchase and sale
agreement for the remaining equity interests in ACI in August 2001 and the
acquisition was consummated in October 2001.

                                       13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS:

RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS: In March 2000, we paid cash of
$20.0 million for an approximate 24% interest in Access Cash International,
L.L.C (ACI) a limited liability company that provides automated teller machine
(ATM) management services. This investment was being accounted for under the
equity method of accounting and was included in long-term investments in our
consolidated balance sheet as of June 30, 2001. The difference of $20 million
between the carrying value of the investment and the underlying equity in the
net assets of ACI was being accounted for in the same manner as goodwill and was
being amortized over 15 years and included in our consolidated financial
statements in interest and other income (expense) along with our share of ACI's
losses. The carrying value of this investment was approximately $18.0 million at
June 30, 2001.

We previously agreed to make up to $35 million of cash available for supplying
ATMs managed by ACI and had supplied $21.7 million of cash for this purpose as
of June 30, 2001. This cash is classified as long-term restricted cash in the
accompanying balance sheet. We also agreed to guarantee up to $3.0 million
(Canadian) face value of equipment leases for Canadian customers of ACI and has
indicated that, subject to the mutual agreement of the parties upon definitive
terms and conditions, we would be willing to work towards an arrangement under
which we would loan ACI up to $12.0 million to enable it to undertake mutually
agreed-upon acquisitions. No such loans or lease guarantees were provided
through June 30, 2001.

In September 2000, we entered into an ATM deployment and management agreement
with ACI under which we received fees paid by customers utilizing ATMs deployed
by us and interchange fees from their banks. ACI managed this network of ATMs in
exchange for a management fee determined by reference to the number of ATMs
deployed. We and ACI entered into an agreement dated June 29, 2001 (Amendment
Agreement) to amend the ATM deployment and management agreement whereby ACI
agreed to assign its revenue from equipment sales and maintenance during the
second quarter of 2001 to us in order to settle various disputes that had arisen
regarding ACI's performance under the ATM deployment and management agreement.

The Amendment Agreement also amended the ATM deployment and management agreement
so that, commencing in July 2001, we assumed the responsibility for future ATM
equipment sales and related maintenance and agreed to pay ACI a fixed monthly
fee of $0.7 million to support these activities. We retained the right to cancel
this feature of the Amendment Agreement if the equipment sales and maintenance
revenues did not exceed $0.6 million per month. The Amendment Agreement also
provided that we would pay ACI an additional $0.25 million per month under the
ATM deployment and management agreement to provide further incentives to ACI to
support our sales efforts and to defray the cost to ACI of doing so. The
Amendment Agreement also extended the minimum term of the ATM deployment and
management agreement through March 31, 2002.

We and the then majority owner of ACI also entered into an agreement dated July
2, 2001 (Letter Agreement) acknowledging our mutual desire to pursue a
transaction by which we would acquire the remaining 76% of ACI. The Letter
Agreement required us to pay $150,000 to the other owners of ACI if we had not
acquired the remaining equity interests in ACI was not consummated by July 31,
2001, with additional payments becoming due if we had not acquired the remaining
equity interests in ACI by subsequent milestone dates through March 31, 2002. In
addition, the Letter Agreement required us to pay the other owners of ACI
$200,000 in exchange for their agreement not to pursue other potential
purchasers of their equity interests in ACI.


                                       14

<PAGE>
Subsequent to the issuance of our consolidated financial statements as of and
for the three and six months ended June 30, 2001, management determined that the
payments made among us, ACI and the owner of the remaining equity interests in
ACI in accordance with the Amendment Agreement and Letter Agreement discussed in
Note 4 should be accounted for as advances and repayments, with the net amount
to become an increase or decrease in the purchase price for our acquisition of
the remaining equity interests in ACI. Previously, we had recorded revenue of
$2.1 million in the three months ended June 30, 2001, based on ACI's assignment
in the Amendment Agreement of its equipment sales in the second quarter of 2001
to us to settle disputes related to an existing ATM deployment and management
agreement.

In February 2002, in response to questions raised by a former ACI employee
regarding the accounting for the Amendment Agreement, we conducted a review
which included a review of the accounting for the Amendment Agreement and the
Letter Agreement. Based on the review, management has concluded that these two
agreements are inter-dependent and, in substance are one agreement that became
effective in July 2002, and that the various elements of the two agreements can
not be economically separated so as to support accounting for each element
independently. As a result, the payments among ACI, us and the owner of the
remaining equity interests in ACI should be accounted for as advances and
repayments rather than as revenues and expenses with the net amount to become
an increase or decrease in the purchase price for our acquisition of the
remaining equity interests in ACI. Accordingly, the accompanying consolidated
financial statements have been restated from amounts previously reported to
account for the transactions resulting from these two agreements as discussed
above and in Note 4 and to record the appropriate related adjustments to the
provision for income taxes and our equity in the earnings of ACI. The effects
of the restatement on the consolidated financial statements are illustrated in
Note 12.

OVERVIEW: We provide transaction processing and ATM outsourcing services,
decision support and risk management products as well as information technology
consulting and business process management services to financial institutions,
retailers, electronic funds transfer networks, e-commerce providers and
government agencies. Our payment system and services segment offers all of our
products and services to all of our customers other than government agencies.
Our government services segment provides online electronic transfer of benefits
(EBT) under entitlement programs on behalf of state and local governments and
Medicaid eligibility verification services. We operate primarily in the United
States, although our payment systems and services segment has international
operations. We previously organized our business into three segments. Prior
period segment data have been restated to conform to the current period
presentation.

We had previously announced an intention to exit the government services
business when our current contractual commitments expire in 2006, but we are now
willing to consider EBT contracts that extend beyond this date. Although
revenues in this segment may continue to decline in the near term, we will now
consider the extension or renewal of existing contracts when such extensions or
renewals can be accomplished on a profitable basis. We intend to continue to
take steps to improve profitability of this business.

Our consolidated financial statements have been prepared using the historical
results of operations and historical bases of the assets and liabilities of the
former Deluxe businesses that comprise our Company. The consolidated financial
statements for the first quarter of 2000 also include allocations to us of
certain liabilities and expenses, including profit sharing and other employee
benefits; information technology services; facility costs; and other Deluxe
administrative services costs. The expense allocations were determined on bases
that both Deluxe and we considered to be a reasonable reflection of the
utilization of the services provided to us or the benefit received by us. The
expense allocation methods were based on number of employees, transaction
processing costs, square footage and relative sales.

The financial information presented in this report may not necessarily reflect
what our financial position, results of operations or cash flows would have been
had we been a separate, stand-alone entity for all periods presented, nor is it
indicative of our future financial position, results of operations or cash
flows.



                                       15

<PAGE>
RESULTS OF OPERATIONS - QUARTER AND SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO
QUARTER AND SIX MONTHS ENDED JUNE 30, 2000

The following table presents, for the periods indicated, the relative
composition of net revenues and selected statements of operations data as a
percentage of net revenues:

<TABLE>
<CAPTION>
                                                      Quarters Ended June 30,   Six Months Ended June 30,
                                                      -----------------------   -------------------------
                                                         2001         2000          2001         2000
                                                       --------     --------      --------     --------
<S>                                                   <C>           <C>         <C>            <C>
Net revenue
  Payment systems and services ....................       91.2%        89.1%         91.3%        88.7%
  Government services .............................        8.8         10.9           8.7         11.3
                                                       --------     --------      --------     --------
    Total net revenues ............................      100.0        100.0         100.0        100.0
                                                       --------     --------      --------     --------

Cost of revenue
  Payment systems and services ....................       55.8         51.1          57.1         50.8
  Government services
    Cost of revenue excluding loss contract charges        5.7          7.8           5.6          8.0
    Loss contract and asset impairment charges ....        0.0          9.6           0.0          4.8
                                                       --------     --------      --------     --------
      Total cost of revenue .......................       61.5         68.5          62.7         63.6
                                                       --------     --------      --------     --------

Gross margin ......................................       38.5         31.5          37.3         36.4
                                                       --------     --------      --------     --------

Selling, general and administrative expense .......       29.4         37.1          30.3         37.8
                                                       --------     --------      --------     --------

Income (loss) from operations .....................        9.1         (5.6)          7.0         (1.4)
                                                       --------     --------      --------     --------

Other income (expense)
  Interest expense ................................       (0.1)        (0.6)         (0.2)        (0.9)
  Interest and other income (expense) .............        0.4         (0.3)          0.5         (0.0)
                                                       --------     --------      --------     --------

Income before income taxes ........................        9.4         (6.5)          7.3         (2.3)

Benefit (provision) for income taxes ..............       (3.3)         2.0          (2.6)         0.6
                                                       --------     --------      --------     --------

Net income ........................................        6.1%        (4.5)%         4.7%        (1.7)%
                                                       ========     ========      ========     ========
</TABLE>

NET REVENUE - Net revenue increased $25.1 million, or 24.8%, to $126.1 million
in the second quarter of 2001 from $101.0 million in the second quarter of 2000.
Net revenue increased $49.4 million, or 24.6%, to $250.6 million for the first
six months of 2001 from $201.2 million in the first six months of 2000.

Payment systems and services net revenue increased $25.0 million, or 27.8%, to
$115.0 million in the second quarter of 2001 from $90.0 million in the second
quarter of 2000. Net revenue increased $50.2 million, or 28.1%, to $228.7
million for the first six months of 2001 from $178.5 million in the first six
months of 2000. The ATM management and deployment agreement that we entered into
in September 2000, the opening of a new call center in Mumbai, India late in the
fourth quarter of 2000, increased sales of new account opening products and
increased software sales, particularly in the second quarter of 2001, were major
drivers of our growth. Increases in transaction processing volumes in both the
first and second quarters of 2001 over 2000 also contributed to our increase in
revenue. These increases were somewhat offset by a decrease in revenue from the
Company's check authorization business over the comparable periods in the prior
year resulting from customer losses through industry consolidation, bankruptcies
and pricing concessions associated with the execution of longer term contracts
and by a decline in revenue earned from Deluxe.



                                       16


<PAGE>
Deluxe has been, and is expected to continue to be, one of our most significant
customers. During the second quarter of 2001, total net revenue from Deluxe was
$12.1 million, or 9.6% of our total net revenue, compared to $14.8 million, or
14.7% of our total net revenues in the second quarter of 2000. For the first two
quarters of 2001, total net revenue from Deluxe was $26.5 million, or 10.6% of
our total net revenue compared to $30.4 million, or 15.1% of our total net
revenue, in the first two quarters of 2000. Further expense reduction efforts by
Deluxe could cause the revenue we receive from Deluxe to continue to decline in
future periods.

The Amendment Agreement dated June 29, 2001 extended our ATM management and
deployment agreement with ACI in which we have a 24% interest through at least
March 31, 2002. In addition we took steps to improve the future performance of
this arrangement by creation of a co-branding initiative with one of our
processing customers.

Government services net revenue increased $0.1 million, or 0.8%, to $11.1
million in the second quarter of 2001 from $11.0 million in the second quarter
of 2000. Net revenue decreased $1.0 million, or 4.2%, to $21.8 million for the
first six months of 2001 from $22.8 million in the first six months of 2000. The
decrease in revenue for the first six months of 2001 compared to the first six
months of 2000 was primarily due to the expiration of an electronic
benefit-switching contract in the second quarter of 2000. This decline was
partially offset by increased revenues from Medicaid eligibility verification
services coupled with an increase in the number of cases processed. Although we
continue to pursue EBT contracts where we can obtain them on a profitable basis,
there may be a decline in the revenues of the government services segment as
existing contracts expire. Our Medicaid eligibility verification contract with
the state of New York expires at the end of October 2001 and the minimum annual
revenue from this contract is $11.3 million. New York has the option to extend
the contract on a month-to-month basis through April 2002. We do not know
whether New York will exercise any of its extension options.

COST OF REVENUE - Cost of revenue increased $8.4 million, or 12.1%, to $77.5
million in the second quarter of 2001 from $69.1 million in second quarter of
2000. Cost of revenue increased $29.3 million, or 22.9%, to $157.2 million in
the first six months of 2001 from $127.9 million in the first six months of
2000. As a percentage of revenue, cost of revenue was 61.5% for the second
quarter of 2001 compared to 68.5% for the second quarter of 2000. For the first
six months of 2001, cost of revenue as a percentage of revenue was 62.7%
compared to 63.6% for the first six months of 2000. Excluding a charge of $9.7
million for future losses on certain government EBT contracts incurred in the
second quarter of 2000, cost of revenue as a percentage of revenue was 58.9% for
the second quarter of 2000 and 58.8% for the first six months of 2000.

Payment systems and services cost of revenue increased by $18.7 million, or
36.2%, to $70.3 million in the second quarter of 2001 from $51.6 million in the
second quarter of 2000. Cost of revenue increased by $40.9 million, or 40.0%, to
$143.1 million in the first six months of 2001 from $102.2 million in the first
six months of 2000. As a percentage of segment revenue, cost of revenue was
61.2% for the second quarter of 2001 compared to 57.4% for the second quarter of
2000. For the first six months of 2001, cost of revenue as a percentage of
segment revenue was 62.6% compared to 57.3% for the first six months of 2000.
The increase in cost of revenue in both dollar and percentage terms was driven
primarily by the ATM management and deployment agreement which was entered into
in September 2000 and for which the cost of revenue currently approximates the
associated net revenue. The opening of the new call center in Mumbai, India also
caused cost of revenue to increase over both the second quarter and first six
months of last year.



                                       17

<PAGE>
Government services cost of revenue decreased $10.3 million, or 58.9%, to $7.2
million in the second quarter of 2001 from $17.5 million in the second quarter
of 2000. Cost of revenue decreased $11.6 million, or 45.3%, to $14.1 million in
the first six months of 2001 from $25.7 million in the first six months of 2000.
As a percentage of segment revenue, cost of revenue was 64.9% for the second
quarter of 2001 compared to 159.4% for the second quarter of 2000. For the first
six months of 2001, cost of revenue as a percentage of segment revenue was 64.5%
compared to 112.9% for the first six months of 2000. Excluding a charge of $9.7
million for future losses on certain government EBT contracts incurred in the
second quarter of 2000, cost of revenue as a percentage of revenue was 71.1% for
the second quarter of 2000 and 70.3% for the first six months of 2000. The
reduction in cost of revenue for both the quarter and six months ended June 30,
2001 compared to the adjusted results for the same periods in the prior year is
a reflection of continuing efforts to reduce the cost of supporting a declining
revenue stream and a reduction in costs due to the expiration of an electronic
benefit switching contract in the second quarter of 2000.

GROSS MARGIN - Gross margin increased by $16.7 million, or 52.5%, to $48.5
million in the second quarter of 2001 from $31.8 million in the second quarter
of 2000. Gross margin increased by $20.1 million, or 27.4%, to $93.4 million in
the first six months of 2001 from $73.3 million in the first six months of 2000.
As a percentage of revenue, gross margin was 38.5% for the second quarter of
2001 compared to 31.5% for the second quarter of 2000. For the first six months
of 2001, gross margin as a percentage of revenue was 37.3% compared to 36.4% for
the first six months of 2000. Excluding a charge of $9.7 million for future
losses on certain government EBT contracts incurred in the second quarter of
2000, gross margin as a percentage of revenue was 41.1% for the second quarter
of 2000 and 41.3% for the first six months of 2000.

The decrease in gross margin as a percentage of net revenue is due to the ATM
management and deployment agreement. In the second quarter of 2001, this
agreement made a slightly positive contribution to gross margin of $0.5 million,
but it exhibited a slightly negative gross margin for the first six months of
2001 of $(0.1) million. We continue to carefully evaluate the performance of
this agreement and during the second quarter of 2001 we took steps to enhance
the profitability of this agreement by negotiating a co-branding arrangement
with one of our debit processing customers. The decrease in gross margin
attributable to the ATM management and deployment agreement was partially offset
by positive margin contributions by the new call center operation in Mumbai,
India, increased sales of software at generally higher margins and cost
reduction efforts in the government services segment. Excluding the effect of
the ATM management and deployment agreement, gross margin for the second quarter
and first six months of 2001 would have improved to 44.2% and 43.0% of revenue,
respectively.

SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES - SG&A expense decreased by
$0.4 million, or 1.1%, to $37.0 million in the second quarter of 2001 from $37.4
million in the second quarter of 2000. SG&A expense decreased by $0.4 million,
or 0.5%, to $75.8 million in the first six months of 2001 from $76.2 million in
the first six months of 2000. As a percentage of revenue, SG&A expense was 29.4%
for the second quarter of 2001 compared to 37.1% for the second quarter of 2000.
For the first six months of 2001, SG&A expense as a percentage of revenue was
30.3% compared to 37.8% for the first six months of 2000. Excluding a charge of
$3.2 million taken in the first quarter of 2001 primarily for severance costs
related to the closure of our operations in Bothell, Washington and a charge of
$2.9 million taken in the second quarter of 2000 related to separation costs
from Deluxe, SG&A expense as a percentage of revenue was 29.0% for the first six
months of 2001 compared to 36.4% for the first six months of 2000. Factors
contributing to the decrease in SG&A expense were lower levels of spending in
2001 for promotional advertising and continued integration and consolidation
efforts, offset somewhat by increased travel and other costs associated with the
new call center in Mumbai, India.



                                       18


<PAGE>
     OTHER INCOME (EXPENSE) - Other income was $0.3 million during the second
quarter of 2001 compared to other expense of $(1.0) million for the second
quarter of 2000. For the first six months of 2001, other income was $0.8 million
compared to other expense of $(1.8) million for the first six months of 2000.
Other income in 2001 includes the interest earned on cash and cash equivalents,
offset by goodwill amortization related to our investment in ACI, our share of
ACI's earnings and interest on our India line of credit (which was repaid in
March of 2001). Other expense in 2000 includes interest expense related to our
intercompany balance payable to Deluxe (which was settled at the Spin-Off) and
interest expense on borrowings under our India line of credit, offset by
interest earned on cash and cash equivalents. The primary driver of the decrease
in other expense is the absence of interest due to Deluxe on inter-company
balances in 2001.

PROVISION FOR INCOME TAXES - The provision for income taxes was $4.1 million in
the second quarter of 2001 compared to a $2.0 million income tax benefit in the
second quarter of 2000 resulting in effective tax rates of 34.4% and (30.7)%,
respectively. The effective tax rate for the first six months of 2001 was 35.7%
compared to (27.7)% for the first six months of 2000. During the second quarter
of 2001, the effective tax rate for 2001 was reduced from 38.0% to 35.7%. This
rate reduction was obtained as a result of the Company recognizing the income
tax benefit of certain federal net operating losses. The income tax benefit of
these losses was not previously recognized. Our Indian software development and
business process management operations qualify for tax incentives associated
with businesses that operate within designated geographic locations. Such
incentives generally provide us with exemptions from Indian tax on certain
business income generated from these operations. These incentives phase out
through March 2009.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION - At June 30, 2001, cash
and cash equivalents were $80.3 million. We had $5.4 million of restricted cash
that we temporarily hold in custodial accounts on behalf of clients and had
supplied $21.7 million in restricted cash to ATMs deployed by us. We have agreed
with ACI to make up to $35 million of cash available for this purpose. We have
also agreed to guarantee up to $3.0 million (Canadian) face value of equipment
leases for Canadian customers of this company and we have indicated that,
subject to the mutual agreement of the parties upon definitive terms and
conditions, we would be willing to work towards an arrangement under which we
would loan this company up to $12.0 million to enable it to undertake mutually
agreed-upon acquisitions. No such loans or lease guarantees have been provided
through June 30, 2001.

As of June 30, 2001, the Company's India operations had a $10.0 million credit
facility, denominated in Indian rupees, available at the lender's prime interest
rate. Borrowings under this facility are due on demand. We repaid the
outstanding balance of the facility in March 2001 and $8.5 million of a $10.0
million time deposit account maintained to support our guaranty of this facility
was returned to us. The average amount drawn on this credit facility during the
first quarter of 2001 was $5.3 million at a weighted average interest rate of
15.5%. The average amount drawn on this line during 2000 was $4.5 million at a
weighted average interest rate of 15.4%. We did not draw on this facility during
the second quarter of 2001, although we issue letters of credit in the ordinary
course of business under this facility. At June 30, 2001 the aggregate value of
outstanding letters of credit amounted to $0.7 million. These letters of credit
are collateralized by the remaining $1.5 million of the $10.0 million time
deposit account maintained with the issuer.

We obtained a $15.0 million revolving credit facility on December 29, 2000. This
facility has a term of nine months and borrowings thereunder will bear interest
at either the lender's base or offshore rate at our discretion. Although we did
not borrow any funds under this facility through June 30, 2001, we did post an
irrevocable standby letter of credit in the amount of $4.0 million to guarantee
our performance under a government services contract with the state of New York.
The issuance of this letter of credit reduced our borrowing capacity under the
facility to $11.0 million. The facility is guaranteed by certain of our
subsidiaries and requires us to comply with certain financial and non-financial
covenants. We are in compliance with these covenants. We intend to replace the
$15.0 million facility with a larger credit facility with one or more financial
institutions prior to its maturity. If we are unable to secure a replacement
credit facility prior to maturity, we will repay any outstanding borrowings from
available cash and cash equivalents.



                                       19


<PAGE>
In connection with our EBT and collection activities, we post surety bonds with
state agencies guaranteeing our performance of certain obligations related to
contracts or state requirements. The aggregate amount of such bonds outstanding
at June 30, 2001 was $9.0 million.

The following table sets forth a summary of our cash flow activity and should be
read in conjunction with our unaudited consolidated statements of cash flows:

<TABLE>
<CAPTION>
                                                Summary of Cash Flows
                                              Six Months Ended June 30,
                                              -------------------------
(dollars in thousands)                           2001           2000
                                               --------       --------
<S>                                            <C>            <C>
Cash provided by operating activities ...      $  7,699       $ 20,888
Cash used in investing activities .......       (15,427)       (35,477)
Cash provided by financing activities ...         9,317         76,156
Adjustment for lag in financial reporting          --           (4,127)
                                               --------       --------
Net increase in cash and cash equivalents      $  1,589       $ 57,440
                                               ========       ========
</TABLE>

Cash flows from operating activities were $7.7 million and $20.9 million for the
six months ended June 30, 2001 and 2000, respectively. The decrease in operating
cash flow reflects the payment of employee profit sharing and bonus plan
obligations relating to 2000 and an increase in accounts receivable reflective
of the growth of the company. Days sales outstanding in accounts receivable was
56.7 at June 30, 2001 compared to 54.1 at June 30, 2000. The increase is due to
the change in the processing of our billings to and from Deluxe Corporation
since the Spin-Off. Prior to the Spin-Off, we and Deluxe settled all billing
activity through a single inter-company account. Subsequent to the Spin-Off, we
send Deluxe invoices, which are recorded as receivables.

Cash used in investing activities was $15.4 million for the six months ended
June 30, 2001, primarily due to purchases of capital assets and expenditures for
software investments. Cash used in investing activities was $35.5 million for
the six months ended June 30, 2000, primarily due to the investment of $20.0
million to purchase a 24% interest in ACI and purchases of capital assets and
software investments of $16.0 million.

Cash provided from financing activities was $9.3 million for the six months
ended June 30, 2001. We used cash to repay debt of $6.5 million, including the
repayment of $5.3 million outstanding under our Indian credit facility. In
connection with that repayment, the lender returned $8.5 million of the $10.0
million that we had placed in a time deposit account as collateral to support
our guarantee of this facility. The remaining $1.5 million remains on deposit
with the lender as collateral for letters of credit issued under this facility.
In addition, proceeds from the exercise of stock options and shares purchased
through the employee stock purchase plan provided cash of $7.3 million. Cash
provided from financing activities was $76.2 million for the six months ended
June 30, 2000. We completed our IPO in June 2000, generating proceeds of $62.0
million. In addition, Deluxe provided $10.1 million to increase the
capitalization of the Company in preparation for the Spin-Off and we used cash
to repay debt of $1.0 million. We also borrowed $5.0 million against our credit
facility in India.

The adjustment for the lag in financial reporting during December 1999
represents the net cash flows of our Indian operations. Previously, this
business reported its results of operations and financial position on a
one-month lag. In January 2000, this business changed its reporting period to
coincide with the rest of our Company.

We believe that cash generated from operations, borrowings under available
credit facilities and our current unrestricted cash balance will provide
sufficient funds for our operations for the foreseeable future.



                                       20


<PAGE>
FORWARD LOOKING STATEMENTS - Although the Company's previously stated
expectations for the full year 2001 remain substantially unchanged, it is
mindful of the challenges that a further slowdown in the economy could bring to
the pace of new business activity and client spending. The Company's
expectations for the third quarter are as follows:

   -  The annualized effective tax rate is expected to approximate 36 percent.
      The reduced rate is a result of successful tax planning and includes the
      negative impact of non-deductible goodwill amortization charges;

   -  Third quarter revenues are expected to be within the range currently
      anticipated by the analysts included in the First Call survey for the
      Company ($130 to $140 million); and

   -  Third quarter basic earnings per share are projected to be approximately
      $0.24.

RECENTLY ISSUED ACCOUNTING STANDARDS - In June 1998, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 133,
Accounting for Derivative Instruments and Hedging Activities, which provides
guidance on accounting for derivatives and hedge transactions. The statement was
effective for us on January 1, 2001. The effects of this pronouncement have not
had a material impact on our reported operating results or financial position.

In July 2001, the FASB issued Statement of Financial Accounting Standards No.
141, Business Combinations, which establishes new standards for accounting and
reporting requirements for business combinations and will require that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interests method is prohibited. We do
not believe that SFAS No. 141 will have a material impact on our consolidated
financial statements.

In July 2001, the FASB issued Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets that will become effective for us on
January 1, 2002. SFAS 142 requires, among other things, the cessation of the
amortization of goodwill. In addition, the standard includes provisions for the
reclassification of certain existing recognized intangibles such as goodwill,
reassessment of the useful lives of existing recognized intangibles,
reclassification of certain intangibles out of previously reported goodwill and
the identification of reporting units for purposes of assessing potential future
impairments of goodwill. SFAS 142 also requires us to complete a transitional
goodwill impairment test six months from the date of adoption. We are assessing
the impact this new standard will have on our consolidated balance sheet and
statement of operations. Goodwill amortization for the second quarter of 2001
and the first six months of 2001 amounted to approximately $1.0 million and $2.0
million, respectively.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We operate internationally, and so are subject to potentially adverse movements
in foreign currency rate changes. We have not entered into foreign exchange
forward contracts to reduce our exposure to foreign currency rate changes on
inter-company foreign currency denominated balance sheet positions.

We are exposed to foreign exchange risk to the extent of adverse fluctuations in
the Indian rupee and the British pound. We do not believe that a change in the
Indian rupee and British pound exchange rates of 10% would result in a material
effect on our future earnings, financial position or cash flows. As our
international operations continue to grow and the related foreign exchange risks
increase, we may seek to enter into transactions that qualify for hedge
accounting treatment under SFAS No. 133 to reduce our exposure to foreign
currency rate changes.



                                       21


<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On June 2, 2000, James Stern sued the Company, Deluxe and a number of financial
institutions in the Superior Court of California, County of Los Angeles alleging
that the Company's ChexSystems product racially profiles and discriminates
against minorities and prevents consumers from living above the poverty level.
The defendants removed this case to the United States District Court for the
Central District of California on June 30, 2000. On September 12, 2000, the
District Court dismissed Mr. Stern's case for failure to state a claim upon
which relief could be granted. The District Court gave Mr. Stern leave to amend
and refile his complaint and he did so on September 19, 2000 alleging unfair
business practices and civil rights violations by all defendants. The case was
subsequently remanded to the Superior Court of California, County of Los
Angeles. The Superior Court dismissed Mr. Stern's case with prejudice on June
21, 2001 and ordered Mr. Stern to pay $375 to the defendants.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

The Registration Statement on Form S-1 (Registration No. 333-33992) related to
our initial public offering of shares of our common stock (together with certain
associated preferred stock purchase rights) was declared effective on June 26,
2000, and the related offering commenced on June 27, 2000. We sold 5,500,000
shares at a price of $13.00 per share on June 30, 2000 for an aggregate public
offering price of $71,500,000.

The net offering proceedings to the Company after deducting the total expenses
associated with the offering was estimated to be $64,459,370. The following
table summarizes the amount of these net-offering proceeds that were used during
the period from the effective date of the offering through June 30, 2001 for the
purposes shown:

<TABLE>
<S>                                                                 <C>
  Infrastructure and cost savings initiatives ..................    $13,000,000*
  Product development expenditures .............................     10,200,000*
  Construction of plants, buildings and facilities .............      7,400,000*
  Purchase and installation of machinery and equipment .........      8,600,000*
  Purchases of real estate .....................................              0
  Acquisition of other businesses ..............................              0
  Repayment of indebtedness ....................................      5,303,000
  Working capital ..............................................              0
  Temporary investments (money market funds and commercial paper
    having a maturity of two weeks or less) ....................     19,956,370
                                                                    -----------
      Total ....................................................    $64,459,370
                                                                    ===========
</TABLE>

  *Estimated



                                       22


<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company held its annual Stockholder's meeting on April 19, 2001. 35,388,947
shares were represented at the meeting, constituting 77.8% of the shares
outstanding and eligible to vote. Five items were considered at the meeting and
the results of the voting were as follows:

Proposal 1. To Elect Two Nominees to the Board of Directors:

<TABLE>
<CAPTION>
       Nominees                       For                        Withheld
       --------                       ---                        --------
<S>                                <C>                           <C>
     Jack Robinson                 35,241,695                    147,525
   Sheila A. Penrose               35,244,084                    144,863
</TABLE>

Proposal 2. To Approve the Adoption of the eFunds Corporation Annual Incentive
Plan:

<TABLE>
<CAPTION>
          For                       Against                      Abstain
          ---                       -------                      -------
<S>                                <C>                           <C>
      25,800,135                   1,113,906                     498,920
</TABLE>

Proposal 3. To Approve the Adoption of the eFunds Corporation 2000 Stock
Incentive Plan:

<TABLE>
<CAPTION>
          For                       Against                      Abstain
          ---                       -------                      -------
<S>                                <C>                           <C>
      14,051,598                   12,885,927                    475,436
</TABLE>

Proposal 4. To Approve the Adoption of the eFunds Corporation Employee Stock
Purchase Plan:

<TABLE>
<CAPTION>
          For                       Against                      Abstain
          ---                       -------                      -------
<S>                                 <C>                          <C>
      26,363,698                    801,909                      247,484
</TABLE>

Proposal 5. To ratify the Selection of Deloitte & Touche LLP as the Company's
Independent Auditors:

<TABLE>
<CAPTION>
          For                       Against                      Abstain
          ---                       -------                      -------
<S>                                 <C>                          <C>
      35,028,698                    115,301                      244,948
</TABLE>

The terms of office of our directors John A. Blanchard III, Hatim A. Tyabyi,
John J. (Jack) Boyle III and Janet M. Clarke continued after the meeting.

ITEM 5. OTHER INFORMATION

RISK FACTORS AND CAUTIONARY STATEMENTS.

When used in this Quarterly Report on Form 10-Q and in future filings by the
Company with the Securities and Exchange Commission (the "Commission"), in the
Company's press releases, letters and reports to stockholders and in oral
statements made by the Company's representatives, the words or phrases "should
result," "are expected to," "targeted," "will continue," "will approximate," "is
anticipated," "estimate," "project" or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are necessarily
subject to certain risks and uncertainties, including those discussed below that
could cause actual results to differ materially from the Company's historical
experience and its present expectations or projections. Caution should be taken
not to place undue reliance on any such forward-looking statements, which speak
only as of the date made. The factors listed below could affect the Company's
financial performance and could cause the Company's actual results for future
periods to differ from any opinions or statements expressed with respect
thereto. Such differences could be material and adverse. The Company will not
undertake and specifically declines any obligation to publicly release the
result of any revisions that may be made to any forward-looking statements to
reflect events or circumstances occurring after the date of such statements or
to reflect the occurrence of anticipated or unanticipated events.



                                       23
<PAGE>
ESTIMATES OF FUTURE FINANCIAL RESULTS ARE INHERENTLY UNRELIABLE.

From time to time, representatives of the Company make public predictions or
forecasts regarding the Company's future results, including estimates regarding
future revenues, expense levels, earnings or earnings from operations. Any
forecast regarding the Company's future performance reflects various
assumptions. These assumptions are subject to significant uncertainties, and, as
a matter of course, many of them will prove to be incorrect. Further, the
achievement of any forecast depends on numerous factors (including those
described in this discussion), many of which are beyond the Company's control.
As a result, there can be no assurance that the Company's performance will be
consistent with any management forecasts or that the variation from such
forecasts will not be material and adverse. Investors are cautioned not to base
their entire analysis of the Company's business and prospects upon isolated
predictions, but instead are encouraged to utilize the entire available mix of
historical and forward-looking information made available by the Company, and
other information relating to the Company and its products, when evaluating the
Company's prospective results of operations.

In addition, representatives of the Company may occasionally comment publicly on
the perceived reasonableness of published reports by independent analysts
regarding the Company's projected future performance. Such comments should not
be interpreted as an endorsement or adoption of any given estimate or range of
estimates or the assumptions and methodologies upon which such estimates are
based. Undue reliance should not be placed on any comments regarding the
conformity, or lack thereof, of any independent estimates with the Company's own
present expectations regarding its future results of operations. The
methodologies employed by the Company in arriving at its own internal
projections and the approaches taken by independent analysts in making their
estimates are likely different in many significant respects. Although the
Company may presently perceive a given estimate to be reasonable, changes in the
Company's business, market conditions or the general economic climate may have
varying effects on the results obtained through the use of differing analyses
and assumptions. The Company expressly disclaims any continuing responsibility
to advise analysts or the public markets of its view regarding the current
accuracy of the published estimates of outside analysts. Persons relying on such
estimates should pursue their own independent investigation and analysis of
their accuracy and the reasonableness of the assumptions on which they are
based.

CONSOLIDATION IN THE INDUSTRIES WE SERVE MAY ADVERSELY AFFECT OUR ABILITY TO
SELL OUR PRODUCTS AND SERVICES.

Mergers, acquisitions and personnel changes at financial institutions and
electronic funds transfer networks may adversely affect our business, financial
condition and results of operations. Currently, the banking and EFT industries
are consolidating, causing the number of financial institutions and ATM networks
to decline. This consolidation could cause us to lose:

      -  current and potential customers;

      -  market share if the combined entity determines that it is more
         efficient to develop in-house products and services similar to ours or
         use our competitors' product and services; and

      -  revenue if the combined institution is able to negotiate a greater
         volume discount for, or discontinue the use of, our products and
         services.

For example, one of the larger customers of our electronic transaction
processing business, the STAR Network, has been purchased by one of our
competitors, Concord EFS. Although we have a processing contract with STAR
through 2002, we cannot presently predict the possible long-term impact of this
acquisition on our business with certainty. The loss of STAR as a processing
customer could have an adverse affect on our business.


                                       24
<PAGE>
OUR ATM DEPLOYMENT INITIATIVE MAY NOT BE SUCCESSFUL.

In September 2000, we entered into a new ATM deployment agreement with ACI in
which we hold a 24% interest. Under this agreement, we have assumed
responsibility for ATM placement strategies and the expansion of ACI's former
ATM base and ACI's responsible for managing and servicing the ATM base in
exchange for a monthly fee determined by reference to the number of ATMs under
management. Our revenues under this contract are received from the fees paid by
consumers utilizing the machines and interchange fees paid by their banks. In
June of 2001, we amended this agreement so that we assumed the responsibility
for sales of ATMs by the limited liability company and we pay ACI a fixed
monthly fee to assist us in these efforts. If we are not successful in
deploying the ATM base in high volume locations or selling ATMs to other
providers, we will not generate sufficient fee income to offset the fees payable
to ACI. In addition, if the agreement were not extended beyond its current
expiration date of March 31, 2002, the revenues derived from this contract would
not continue beyond the first quarter of 2002.

Until the second quarter of 2001, this business operated at a loss. Continued
improvement in the future will depend upon our ability to efficiently manage the
deployment of the ATMs and to generate additional revenues from the installed
ATM base and the sale of new machines. No assurance can be given that we will be
successful in these efforts. In addition, the expansion of the installed base of
ATMs may require the application of increased amounts of cash to keep the
machines appropriately supplied with cash for withdrawal by consumers. We are
continuing to monitor the performance of this agreement and we continue to
evaluate the alternatives available to us to improve the performance of this
arrangement.

WE FACE INTENSE COMPETITION IN ALL AREAS OF OUR BUSINESS, AND IF WE DO NOT
COMPETE EFFECTIVELY, OUR BUSINESS WILL BE HARMED.

We face intense competition from a number of companies. Further, we expect that
competition will intensify as the movement towards increasing consolidation
within the financial services industry continues. Many of our competitors have
significantly greater financial, technical and marketing resources, greater name
recognition and a larger installed customer base than we do.

In the electronic payment management market, our principal competitors include:

   -  third party network and credit card processors, including First Data,
      Equifax, Total System Services, Electronic Data Systems, Concord EFS and
      Alliance Data Systems;

   -  financial institutions that have developed internal processing
      capabilities or services similar to ours, including Bank of America,
      Metavante and Fifth Third National Bank;

   -  electronic data interchange and cash management providers, including
      Fiserv, CheckFree, Metavante, EDS and Fundtech;

   -  electronic bill payment providers, including CheckFree, EDS, MasterCard,
      Spectrum and Visa;

   -  electronic funds transfer software providers, including Transaction
      Systems Architects, SLMsoft, Oasis, Mosaic and PaySys; and

   -  national information database companies and other content providers,
      including Equifax, Experian and Trans Union.

In the market for electronic transaction processing, the principal factors on
which we compete are price and service levels. The future growth of our revenues
in this market is dependent upon securing an increasing volume of transactions.
If we cannot control our transaction processing expenses, we may not remain
price competitive and our revenues will be adversely affected.

Competition for our decision support and risk management products is based
primarily on the quantity and quality of the data available to us for this
purpose and, to a somewhat lesser degree, price. Our competitive position in
these markets could be harmed if our competitors were able to compile different


                                       25
<PAGE>
data sources and analytical capabilities that proved to be more effective than
our products. In addition, competitive pressure on our check verification
business is increasing and may require us to make significant investments to
maintain our customer base and acquire new customers.

In addition to our current competitors, we expect substantial competition from
established and new companies. We cannot assure you that we will be able to
compete effectively against current and future competitors. Increased
competition could result in price reductions, reduced gross margins or loss of
market share.

IF WE FAIL TO DEVELOP AND INTRODUCE NEW AND ENHANCED PRODUCTS AND SERVICES, WE
WILL NOT BE ABLE TO COMPETE EFFECTIVELY AND OUR ABILITY TO GENERATE REVENUES
WILL SUFFER.

Our success will depend in part on our ability to continue to develop and
introduce new and enhanced payment and risk management products and services
that keep pace with competitive introductions, technological changes and
changing customer preferences. If we fail to anticipate or respond adequately to
new developments, we may lose opportunities for business with both current and
potential customers.

For example, we have announced that we intend to develop products and services
that effectively bundle various combinations of our transaction processing, risk
management and professional services offerings into higher-value integrated
product sets. We are continuing to evaluate the initial market opportunities
available to us for these offerings. If we are not successful in developing and
selling these enhanced products and services, our future growth expectations
could be diminished.

WE ARE DEPENDENT UPON CONTINUED GROWTH IN THE MARKET FOR ELECTRONIC DEBIT
PAYMENT SERVICES.

If the electronic debit payments market does not grow or grows more slowly than
expected, our business will suffer. Several factors could inhibit the acceptance
and growth of electronic debit payments, including:

   -  these types of payments are relatively new alternatives to the more
      familiar cash, check and credit card payment options. Consumers and
      businesses may be unwilling to change their established payment
      preferences and adopt these new forms of payment as quickly as we expect;
      and

   -  consumers may be concerned that these newer payment options are not as
      safe or reliable as more traditional payment methods. Consumers may also
      believe that these payment technologies offer a lower level of privacy.

IF WE EXPERIENCE SYSTEM FAILURES, THE PRODUCTS AND SERVICES WE PROVIDE TO OUR
CUSTOMERS COULD BE DELAYED OR INTERRUPTED, WHICH WOULD HARM OUR BUSINESS AND
REPUTATION AND RESULT IN THE LOSS OF CUSTOMERS.

Our ability to provide reliable service largely depends on the efficient and
uninterrupted operations of our computer and telecommunications network systems
and our data centers. Any significant interruptions could severely harm our
business and reputation and result in a loss of revenue and customers. Our
systems and operations could be exposed to damage or interruption from fire,
natural disaster, power loss, telecommunications failure, unauthorized entry and
computer viruses. Although we have taken steps to prevent system failures, we
cannot be certain that our measures will be successful and that we will not
experience service interruptions. Further, our property and business
interruption insurance may not be adequate to compensate us for all losses or
failures that may occur.


                                       26
<PAGE>
LEGISLATION RELATING TO CONSUMER PRIVACY PROTECTION COULD HARM OUR ABILITY TO
COLLECT AND USE DATA, INCREASE OUR OPERATING COSTS OR OTHERWISE HARM OUR
BUSINESS.

Existing and new laws and regulations relating to consumer privacy protection
could harm our ability to collect and use consumer data, increase our operating
costs or otherwise harm our business. We collect personal data about consumers
for use in our decision support and risk management products. Due to the
increasing public concern over consumer privacy rights, Congress and state
legislatures have adopted and are considering adopting laws and regulations
restricting the purchase, sale and sharing of personal information about
consumers. For example, some states have restricted the sale of motor vehicle
records, including driver's license lists, and some states refuse to disclose
this information at all.

The new federal financial modernization law, known as the Gramm-Leach-Bliley
Act, imposes significant new consumer information privacy requirements on any
entity engaged in the business of providing financial services, including
entities that provide services to financial institutions. Federal agencies, such
as the Comptroller of the Currency and the Federal Trade Commission, have issued
regulations to implement these requirements. The Act requires covered companies
to develop and implement policies to protect the security and confidentiality of
consumers' nonpublic personal information and to disclose those policies to
consumers before a customer relationship is established and annually thereafter.
In addition, the Act requires covered companies to give an opt-out notice to
consumers before sharing consumer information with third parties. The opt-out
notice requirement in the Act is subject to several exceptions for credit
reporting and fraud prevention purposes. Although we believe these exceptions
apply to our business, government agencies could interpret their regulations in
a manner that could expand the scope of the Act in ways which could adversely
affect our business. In addition, even if the regulations do not affect us
directly, uncertainty over the scope of the regulations could make financial
institutions unwilling or reluctant to share consumer-related information with
us.

The Act does not prohibit state legislation or regulations that are more
restrictive on our collection and use of data. More restrictive legislation or
regulations have been introduced in the past and could be introduced in the
future in Congress and the states. For example, in the past legislation has been
proposed which would require consumers to opt in to any plan, which would allow
their nonpublic personal information to be disclosed. We are unable to predict
whether more restrictive legislation or regulations will be adopted in the
future. Any future legislation or regulations could have a negative impact on
our business.

IF THE SECURITY OF OUR DATABASES IS COMPROMISED, OUR REPUTATION COULD SUFFER AND
CUSTOMERS MAY NOT BE WILLING TO USE OUR PRODUCTS AND SERVICES.

If the security of our databases is compromised, our business could be
materially adversely affected. In our electronic payments business, we collect
personal consumer data, such as names and addresses, social security numbers,
drivers' license numbers, checking and savings account numbers and payment
history records. Unauthorized access to our database could result in the theft
or publication of personal confidential information and the deletion or
modification of personal records or otherwise cause interruptions in our
operations. These concerns about security are increased when we transmit
information over the Internet. A security or privacy breach may:

   -  deter customers from using our products and services;

   -  harm our reputation;

   -  expose us to liability;

   -  increase our operating expenses to remediate problems caused by the
      breach; and

   -  decrease market acceptance of electronic commerce transactions in general.



                                       27
<PAGE>
WE ARE DEPENDENT ON DELUXE FOR A SIGNIFICANT PORTION OF OUR REVENUE.

In the first half of 2001, net sales to Deluxe represented 10.6% of our total
net revenues. On a year-over-year basis, however, total revenues from Deluxe
declined by 13% to $26.5 million during the first two quarters of 2001 from
$30.4 million in the first half of 2000. Although Deluxe has established minimum
spending targets of $43 million per year through March 31, 2005 for software
development, maintenance and support services from us, further efforts at
expense reduction by Deluxe could cause the revenues we receive from Deluxe to
continue to decline. The loss of Deluxe as a customer or a material reduction in
the amount of services it orders from us would materially adversely affect our
future results of operations and financial condition.

WE MAY EXPERIENCE SOFTWARE DEFECTS, DEVELOPMENT DELAYS AND INSTALLATION
DIFFICULTIES, WHICH WOULD HARM OUR BUSINESS AND REPUTATION AND EXPOSE US TO
POTENTIAL LIABILITY.

Our services and products are based on sophisticated software and computing
systems and we often encounter delays when developing new products and services.
Further, the software underlying our products and services has occasionally
contained and may in the future contain undetected errors or defects when first
introduced or when new versions are released. In addition, we may experience
difficulties in installing or integrating our products and technologies on
platforms used by our customers or in new environments, such as the Internet.
Defects in our software products, errors or delays in the processing of
electronic transactions or other difficulties could result in:

   -  delay in market acceptance;

   -  additional development costs;

   -  diversion of technical and other resources;

   -  loss of customers;

   -  negative publicity; or

   -  exposure to liability claims.

Although we attempt to limit our potential liability for warranty claims through
disclaimers and limitation-of-liability provisions in our license and client
agreements, we cannot be certain that these measures will be successful in
limiting our liability.

WE DEPEND ON THE CONTINUED SERVICES OF OUR KEY OFFICERS.

Our future success depends upon the continued services of a number of key
officers, including John Blanchard, our Chairman and Chief Executive Officer,
Paul Bristow, our Executive Vice President and Chief Financial Officer, and Dr.
Nikhil Sinha, our Executive Vice President, Business Enterprise Group. The loss
of the technical knowledge and industry expertise of any of these officers could
seriously harm our business.



                                       28
<PAGE>
OUR ATTEMPTS TO EXPAND BY MEANS OF ACQUISITIONS AND STRATEGIC ALLIANCES MAY NOT
BE SUCCESSFUL.

Tax requirements related to our Spin-Off from Deluxe will restrict our ability
to complete significant acquisitions through the issuance of our common stock.
Further, our ability to expand in this manner involves many risks, including:

   -  the operations, technology and personnel of any acquired companies may be
      difficult to integrate;

   -  the allocation of resources to consummate these transactions may disrupt
      our business;

   -  acquired businesses may not achieve anticipated revenues, earnings or cash
      flow;

   -  strategic alliances may not be successful or we may not realize
      anticipated benefits in a timely manner, or at all; and

   -  our relationships with existing customers and business partners may be
      weakened or terminated as a result of these transactions.

THERE ARE A NUMBER OF RISKS ASSOCIATED WITH OUR INTERNATIONAL SALES AND
OPERATIONS THAT COULD HARM OUR BUSINESS.

Because we currently sell some of our products and services in Europe, Australia
and South and Latin America, our business is subject to risks associated with
doing business internationally. Also, we may not be successful in selling our
services outside of the United States. In the first half of 2001, we generated
approximately 8.2% of our net sales outside of the United States. Our future
results could be harmed by a variety of factors, including:

   -  changes in foreign currency exchange rates;

   -  changes in a specific country's or region's political and economic
      conditions, particularly in emerging markets;

   -  potentially unfavorable tax rules;

   -  tariffs, duties and other trade barriers;

   -  reduced protection for intellectual property rights;

   -  challenges in managing widespread operations;

   -  changes in foreign laws and regulatory requirements or in foreign policy;
      and

   -  varying business practices in foreign countries.

CHANGES IN INDIAN TAX LAWS COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.

The Company's Indian software development and business process management
operations qualify for tax incentives associated with businesses which operate
within designated geographic locations. These incentives generally provide us
with exemptions from Indian tax on certain business income generated from these
operations and phase out through March 2009. We cannot assure you that these tax
benefits will be continued in the future at their current levels or at all. If
these tax benefits were reduced or eliminated, our taxes in future periods would
likely increase.



                                       29
<PAGE>
WE FACE COLLECTION RISKS ON SOME PAYMENTS.

A debt collection service we commenced in 2000 exposes us to collection risks.
For a limited number of clients of our check authorization service, we purchase
returned checks at a discounted price to the stated check amount and assume the
collection risk on the checks. We base our discounted purchase price on the
collection history of each client. We plan to introduce a check guarantee
program in 2001 pursuant to which we will purchase certain checks presented at
the point of sale at a discount from their face value and assume the subsequent
risk of collection. If we are unable to collect on checks at the expected rates
or if the payment quality of our portfolio of returned checks deteriorates, we
may incur a loss on the checks we purchase.

OUR GOVERNMENT SERVICES BUSINESS HAS HISTORICALLY NOT BEEN PROFITABLE AND
DELUXE'S INDEMNIFICATION MAY NOT BE ADEQUATE.

Our government services business contributed operating losses of approximately
$106,000 during 2000, $6.6 million in 1999 and $47.7 million in 1998. These
amounts include losses we recognized in 2000, 1999 and 1998 that represent
probable future losses from unprofitable long-term service contracts and the
write-off of assets associated with this business. The losses on the long-term
service contracts result from the revenues from the contracts being lower than
expected and the expenses to service the contracts being higher than
anticipated. The assets associated with the government services business were
written off because this business has a negative overall cash flow and its
assets have no resale value.

Deluxe has agreed to indemnify us for future losses arising from any litigation
based on the conduct of the business prior to our initial public offering and
future losses on identified loss contracts in excess of our $29.2 million loss
contract reserves as of April 30, 2000. This indemnification obligation does not
apply to losses contemplated by the existing reserve and is subject to a $14.6
million limit. In addition, Deluxe's indemnification does not apply to any
contract that was not in a loss position as of April 30, 2000 and so if any of
these profitable contracts were to become unprofitable, no indemnification would
be available. Our loss contract reserves are based on estimates of the future
performance of identified contracts, and the estimated results may not be
realized. As a result, we may incur losses beyond our current reserves and
Deluxe's indemnification. For example, a reduction in the number of welfare
recipients below our current expectations could increase our projected future
losses. These excess losses would be recognized in future periods and decrease
our earnings for those future periods.

WE FACE TERMINATION AND COMPLIANCE RISKS WITH RESPECT TO OUR GOVERNMENT
CONTRACTS.

All of our government contracts can be terminated at any time, without cause, by
the contracting governmental entity. We realized 8.8% of our net sales in the
second quarter of 2001 pursuant to contracts of this type. If a government
contract is so terminated, the contractor generally is entitled to receive
compensation only for the services provided or costs incurred at the time of
termination and a reasonable profit on the contract work performed prior to the
date of termination. In addition, all of our government contracts require us to
comply with various contract provisions and procurement regulations, and in some
cases, accounting requirements. Violations of some of these provisions could, if
not cured, result in termination of the contract and fines.

There may be a continuing decline in the revenues of the government services
segment, as existing contracts expire. Our Medicaid eligibility verification
contract with the state of New York expires at the end of October 2001 and the
minimum annual revenue from this contract is $11.3 million. New York has the
option to extend the contract on a month-to-month basis through April 2002.
There can be no assurance that New York will exercise any of its extension
options.



                                       30


<PAGE>
OUR GOVERNMENT SERVICES BUSINESS COULD BE HARMED BY COST OVERRUNS ON FIXED-PRICE
CONTRACTS.

In the second quarter of 2001, approximately 8.8% of our net sales were derived
from fixed-price, variable volume contracts of our government services business.
Under these contracts, we agree to perform services for an agreed unit price and
we bear the entire risk of cost overruns and changing volumes. If we do not
successfully manage these project and contract risks or if our original contract
estimates turn out to be inaccurate, we could suffer cost overruns and penalties
and our reputation and results of operations could be harmed. We recorded
charges of $40.9 million, $8.7 million and $9.7 million in 1998, 1999 and 2000,
respectively, as a result of these risks. We cannot assure you that we will not
incur additional charges of this type or that the indemnification Deluxe has
agreed to provide us with respect to our existing contracts will be sufficient.

WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS.

Despite our efforts to protect our intellectual property rights, third parties
may infringe or misappropriate our intellectual property rights, or otherwise
independently develop substantially equivalent products and services. The loss
of intellectual property protection or the inability to secure or enforce
intellectual property protection could harm our business and ability to compete.
We rely on a combination of trademark and copyright laws, trade secret
protection and confidentiality and license agreements to protect our trademarks,
software and know-how. We have also applied for patent protection on some of the
features of our newer products. We may be required to spend significant
resources to protect our trade secrets and monitor and police our intellectual
property rights.

Third parties may assert infringement claims against us in the future. In
particular, there has been a substantial increase in the issuance of business
process patents, which may have broad commercial implications. Claims for
infringement of all types of patents are becoming an increasing source of
litigation. If we become subject to an infringement claim, we may be required to
modify our products, services and technologies or obtain a license to permit our
continued use of those rights. We may not be able to do either of these things
in a timely manner or upon reasonable terms and conditions. Failure to do so
could seriously harm our business and operating results. In addition, future
litigation relating to infringement claims could result in substantial costs to
us and a diversion of management resources. Adverse determinations in any
litigation or proceeding could also subject us to significant liabilities and
could prevent us from using some of our products, services or technologies.

OUR HISTORICAL FINANCIAL INFORMATION MAY NOT NECESSARILY REFLECT OUR RESULTS AS
A SEPARATE COMPANY.

We have only a limited operating history as an independent company. Some of the
historical financial information we have included in this Quarterly Report on
Form 10-Q has been carved out from Deluxe's consolidated financial statements
and may not necessarily reflect what our results of operations, financial
condition and cash flows would have been had we been a separate, stand-alone
entity during the periods presented.

THERE ARE TAX RISKS ASSOCIATED WITH THE SPIN-OFF.

Deluxe has received confirmation from the Internal Revenue Service that, for
U.S. federal income tax purposes, the Spin-Off was generally tax-free to Deluxe
and to its shareholders. This confirmation was premised on a number of
representations and undertakings made by eFunds and Deluxe to the Internal
Revenue Service, including representations with respect to each company's
intention not to engage in certain transactions in the future. The Spin-Off may
be held to be taxable to Deluxe and to its shareholders who received eFunds
shares if the Internal Revenue Service determines that any of the
representations made were incorrect or untrue in any respect, or if any
undertakings made are not complied with. If, notwithstanding the confirmation of
the Internal Revenue Service, the Spin-Off is held to be taxable, both Deluxe
and its shareholders who received eFunds shares could be subject to a material
amount of taxes. We will be liable to Deluxe for any such taxes incurred by
Deluxe to the extent such taxes are attributable to specific actions or failures
to act by us, or to specific transactions involving us following the Spin-Off.
In addition, we will be liable to Deluxe for a portion of any taxes incurred by
Deluxe


                                       31

<PAGE>
if the Spin-Off fails to qualify a tax-free as a result of a retroactive change
of law or other reasons unrelated to the action or inaction of either us or
Deluxe.

Deluxe generally has sole authority to respond to and conduct all tax
proceedings and tax audits relating to our operations prior to the Spin-Off and
to file all related returns on our behalf. Our tax sharing agreement with Deluxe
also determines the amount of our liability to, or entitlement to payment from,
Deluxe with regard to taxes and tax refunds for these periods. This arrangement
may result in conflicts between Deluxe and us. Under the tax-sharing agreement,
Deluxe may choose to contest, compromise or settle any adjustment or deficiency
proposed by the relevant taxing authority in a manner that may be beneficial to
Deluxe and detrimental to us.

TAX LIMITATIONS ON ISSUANCE OF OUR SHARES WILL RESTRICT OUR ABILITY TO UNDERTAKE
ACQUISITIONS.

We may be limited in the amount of shares that we can issue because the issuance
of our shares may cause the Spin-Off to be taxable to Deluxe under Section
355(e) of the Internal Revenue Code. As a result of such possible adverse tax
consequences, we may be restricted in our ability to effect certain acquisitions
or to enter into other transactions that would result in a change of control of
us.

PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW AND TAX CONSIDERATIONS
RELATED TO THE SPIN-OFF MAY DELAY OR PREVENT A CHANGE IN CONTROL.

Provisions of our certificate of incorporation and bylaws and Delaware law may
delay or prevent a change in control of the Company that you may consider
favorable. These provisions include the following:

   -  no cumulative voting by stockholders for directors;

   -  a classified board of directors with three-year staggered terms;

   -  the ability of our board to set the size of the board of directors, to
      create new directorships and to fill vacancies;

   -  the ability of our board to issue preferred stock, without stockholder
      approval, with rights and preferences that may be superior to our common
      stock;

   -  the ability of our board to amend the bylaws;

   -  a prohibition of stockholder action by written consent;

   -  advance notice requirements for stockholder proposals and for nominating
      candidates to our board;

   -  restrictions under Delaware law on mergers and other business combinations
      between us and any holder of 15% or more of our outstanding common stock;
      and

   -  a requirement that 66-2/3% of our stockholders and 66-2/3% of our
      directors approve certain corporate transactions, including mergers and
      consolidations, sales of assets or amendments to our certificate of
      incorporation.

In addition we have adopted a stockholder rights plan, which discourages the
unauthorized acquisition of 15% or more of our common stock or an unauthorized
exchange or tender offer. Our tax sharing agreement with Deluxe also provides
that we will indemnify Deluxe for any taxes due if the Spin-Off or some of the
related transactions fail to qualify as tax-free because of our actions or
inactions. An acquisition of us by a third party could have such an effect. As a
result, these tax considerations may delay or prevent a third party from
acquiring us in a transaction you may otherwise have considered favorable or
reduce the amount you receive as part of the transaction.


                                       32


<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are filed as part of this report:


<TABLE>
<CAPTION>
Exhibit No.                    Description                                               Method of Filing
-----------   ------------------------------------------------------------------------   ----------------
<S>           <C>                                                                        <C>
   2.1        Initial Public Offering and Distribution Agreement, dated as of March             *
              31, 2000, by and between Deluxe and eFunds (incorporated by reference to
              Exhibit 2.1 to the Registration Statement on Form S-1 (the "S-1") filed
              by the Company with the Securities and Exchange Commission (the
              "Commission") on April 4, 2000, Registration No. 333-33992).

   3.1        Amended and Restated Certificate of Incorporation (incorporated by                *
              reference to Exhibit 3.1 to the S-1)

   3.2        Bylaws (incorporated by reference to Exhibit 3.2 to the S-1)                      *

   4.1        Form of common stock certificate (incorporated by reference to Exhibit            *
              4.1 to Amendment No. 1 to the S-1 filed by the Company with the
              Commission on May 15, 2000 ("Amendment No. 1"), Registration No.
              333-33992)

   4.2        Form of Rights Agreement by and between the Company and Rights Agent,             *
              (incorporated by reference to Exhibit 4.2 to Amendment No. 1)

   4.3        Certificate of Designation of Series A Participating Preferred Stock              *
              (incorporated by reference to Exhibit 4.3 to the Company's Quarterly
              Report on Form 10-Q for the quarter ended June 30, 2000)

   10.3       eFunds Corporation Employee Stock Purchase Plan, as amended April 19,             *
              2001, (incorporated by reference to Exhibit 10.3 of the Company's
              Quarterly Report on For 10-Q for the quarter ended June 30, 2001)
</TABLE>

*Incorporated by reference


(b) Reports on Form 8-K:
    None




                                       33


<PAGE>
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                         eFunds Corporation
                                         (Registrant)


Date: March 4, 2002                      /s/ J. A. Blanchard III
                                         -------------------------------------
                                         J. A. Blanchard III,
                                         Chief Executive Officer and Chairman
                                         (Principal Executive Officer)



Date: March 4, 2002                      /s/ Paul H. Bristow
                                         -------------------------------------
                                         Paul H. Bristow
                                         Executive Vice President and
                                         Chief Financial Officer
                                         (Principal Financial Officer)





                                       34

<PAGE>
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit No.
Description                                                                                  Page No.
-----------   ------------------------------------------------------------------------   ----------------
<S>           <C>                                                                        <C>


</TABLE>







                                       35