<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 September 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)

      Gainey Center II, Suite 300
       8501 North Scottsdale Road
           Scottsdale, Arizona                             85253
(Address of principal executive offices)                 (Zip Code)

        Registrant's telephone number, including area code: 480-629-7700

                          7272 East Indian School Road
                              Scottsdale, AZ 85251
          (Former name or former address, if changed since last report)


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 October 31, 2001 was 46,372,207.

This form 10-Q/A-1 is filed to amend the form 10-Q for September 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>
                                                                               September 30,     December 31,
(dollars in thousands)                                                             2001             2000
                                                                               (unaudited)
                                                                               ------------     ------------
                                                                                (Restated
                                                                                See note 12)
<S>                                                                             <C>              <C>
Current Assets
  Cash and cash equivalents ..............................................      $   85,865       $   78,731
  Time deposit subject to compensating balance arrangement ...............           1,500           10,000
  Restricted cash ........................................................          22,288            3,787
  Accounts receivable - net ..............................................          99,556           57,825
  Deferred income taxes ..................................................          12,589           12,589
  Prepaid expenses and other current assets ..............................           8,505            7,111
                                                                                ----------       ----------
    Total current assets .................................................         230,303          170,043
                                                                                ----------       ----------
Property and equipment - net .............................................          71,733           77,355
Long-term investments ....................................................          18,453           18,500
Restricted cash ..........................................................              --           27,734
Intangibles
  Goodwill - net .........................................................          40,089           43,019
  Software - net .........................................................          35,368           33,150
  Other intangible assets - net ..........................................          13,323           15,004
                                                                                ----------       ----------
    Total intangibles - net ..............................................          88,780           91,173
                                                                                ----------       ----------
Other non-current assets .................................................           8,023            3,302
                                                                                ----------       ----------
        Total non-current assets .........................................         186,989          218,064
                                                                                ----------       ----------
         Total assets ....................................................      $  417,292       $  388,107
                                                                                ==========       ==========
Current Liabilities
  Accounts payable .......................................................      $   25,119       $   29,163
  Accrued liabilities
    Accrued compensation and employee benefits ...........................          18,070           18,703
    Accrued contract losses ..............................................          15,546           22,247
    Other ................................................................          32,542           20,953
  Borrowings on line of credit ...........................................              --            5,303
  Long-term debt due within one year .....................................           2,164            2,100
                                                                                ----------       ----------
    Total current liabilities ............................................          93,441           98,469
Long-term debt ...........................................................             520            2,244
Other long-term liabilities ..............................................              30               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: 46,322,554 shares at September 30, 2001 and 45,500,000 at
     December 31, 2000) ..................................................             463              455
  Additional paid-in capital .............................................         402,661          391,699
  Accumulated deficit ....................................................         (77,767)        (103,233)
  Accumulated other comprehensive loss ...................................          (2,056)          (1,601)
                                                                                ----------       ----------
    Stockholders' equity .................................................         323,301          287,320
                                                                                ----------       ----------
      Total liabilities and stockholders' equity .........................      $  417,292       $  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                    Nine Months Ended
                                                                  September 30,                      September 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 ..........................................      $  132,978       $  104,003       $  383,533       $  305,228
                                                            ----------       ----------       ----------       ----------
  Cost of revenue, excluding loss contract and
    asset impairment charges .........................          76,546           63,475          233,728          181,672
  Loss contract and asset impairment charges/(credits)          (2,500)              --           (2,500)           9,700
                                                            ----------       ----------       ----------       ----------
    Total cost of revenue ............................          74,046           63,475          231,228          191,372
                                                            ----------       ----------       ----------       ----------
Gross Margin .........................................          58,932           40,528          152,305          113,856
                                                            ----------       ----------       ----------       ----------
  Selling, general and administrative expense ........          37,630           34,149          113,440          110,342
                                                            ----------       ----------       ----------       ----------
  Income from operations .............................          21,302            6,379           38,865            3,514
Other Income (Expense)
  Interest expense ...................................             (99)            (465)            (575)          (2,260)
  Interest and other income (expense).................            (163)             960            1,128              985
                                                            ----------       ----------       ----------       ----------
Income before income taxes ...........................          21,040            6,874           39,418            2,239
Provision for income taxes ...........................          (7,395)          (2,987)         (13,952)          (1,702)
                                                            ----------       ----------       ----------       ----------
Net income ...........................................      $   13,645       $    3,887       $   25,466       $      537
                                                            ==========       ==========       ==========       ==========
  Weighted average shares outstanding ................          46,248           45,500           45,850           41,847
                                                            ==========       ==========       ==========       ==========
  Weighted average shares and potential dilutive
    shares outstanding ...............................          48,030           45,500           47,525           41,847
                                                            ==========       ==========       ==========       ==========
Net income per share - basic .........................      $     0.30       $     0.09       $     0.56       $     0.01
                                                            ==========       ==========       ==========       ==========
Net income per share - diluted .......................      $     0.28       $     0.09       $     0.54       $     0.01
                                                            ==========       ==========       ==========       ==========
</TABLE>

See Notes to Unaudited Consolidated Financial Statements



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


<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                September 30,
                                                                         ---------------------------
(dollars in thousands)                                                      2001             2000
                                                                         ----------       ----------
                                                                         (Restated
                                                                         See note 12)
<S>                                                                      <C>              <C>
Cash Flows from Operating Activities
  Net income ......................................................      $   25,466       $      537
  Adjustments to reconcile net income to net cash provided by
    operating activities
      Depreciation ................................................          13,979            8,910
      Amortization of intangibles .................................          16,361           12,242
      Loss on disposals of property and equipment .................             268               91
      Equity in loss of investee ..................................             176               --
      Deferred income taxes .......................................             (44)          (3,347)
      Changes in assets and liabilities
         Restricted cash ..........................................           9,233             (382)
         Accounts receivable ......................................         (41,731)         (13,243)
         Accounts payable .........................................          (4,046)          12,682
         Income taxes receivable/payable ..........................          10,389           12,436
         Accrued contract losses ..................................          (6,702)           5,859
         Other assets and liabilities .............................          (4,078)          (3,943)
                                                                         ----------       ----------
              Net cash provided by operating activities ...........          19,271           31,842
                                                                         ----------       ----------
Cash Flows from Investing Activities
  Capital expenditures ............................................         (22,327)         (27,935)
  Cash paid for investments .......................................          (1,129)         (20,000)
  Investment in time deposit to establish loan guarantee collateral           8,500          (10,000)
  Other ...........................................................              --              674
                                                                         ----------       ----------
              Net cash used in investing activities ...............         (14,956)         (57,261)
                                                                         ----------       ----------
Cash Flows from Financing Activities
  Net borrowings (repayments) on line of credit ...................          (5,303)           9,491
  Payments on long-term debt ......................................          (1,658)          (1,511)
  Proceeds from exercise of stock options .........................           9,780               --
  Proceeds from initial public offering ...........................              --           64,459
  Capital contributions by Deluxe .................................              --           23,905
  Dividends paid to Deluxe ........................................              --          (13,800)
  Other ...........................................................              --                4
                                                                         ----------       ----------
              Net cash provided by financing activities ...........           2,819           82,548
                                                                         ----------       ----------
Adjustment for lag in financial reporting (Note 9) ................              --           (4,127)

Net increase in cash and cash equivalents .........................           7,134           53,002
Cash and cash equivalents at beginning of period ..................          78,731           35,849
                                                                         ----------       ----------
Cash and cash equivalents at end of period ........................      $   85,865       $   88,851
                                                                         ==========       ==========
</TABLE>

See Notes to Unaudited Consolidated Financial Statements


                                       4
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    The consolidated balance sheet as of September 30, 2001, the consolidated
      statements of operations for the quarters and nine month periods ended
      September 30, 2001 and 2000 and the consolidated statements of cash flows
      for the nine month periods ended September 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.

      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


                                       5
<PAGE>
      (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 business process
      outsourcing agreement. If Deluxe fails to spend a minimum of $43 million
      for software development services 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 software development and business process outsourcing
      services was $9.3 million and $13.6 million for the third quarters of 2001
      and 2000, respectively, and $35.8 million and $44.1 million for the
      nine-month periods ended September 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 Businesses 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 for the quarters ended September
      30, 2001 and 2000 was $13.6 million and $3.6 million, respectively. Total
      comprehensive income (loss) for the nine months ended September 30, 2001
      and 2000 was $25.0 million and $(0.5) 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 September 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 $17.3 million at September 30,
      2001.

      The Company previously agreed to make up to $35 million of cash available
      for supplying ATMs managed by ACI and had supplied $20.5 million of cash
      for this purpose as of September 30, 2001. This cash is classified as
      current 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 ACI's Canadian customers and through September 30,
      2001 the Company had guaranteed lease payments amounting to $1.2 million.
      Through September 30, 2001, the Company had not been required to make any
      payments pursuant to these guarantees.

      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
      obligation 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.


                                       7


<PAGE>
      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 two 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.

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 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
      Provision for contract losses ...........         1,295             --
      Reversal of provision for contract losses        (3,795)            --
      Charges to reserve ......................        (1,782)        (1,275)
                                                     --------       --------
      Balance at September 30 .................      $ 15,546       $ 26,459
                                                     ========       ========
</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 to the extent such losses exceed the estimates
      underlying the $29.2 million loss reserve 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 September 30, 2001.



                                       8
<PAGE>
6.    The Company's consolidated balance sheets reflect restructuring accruals
      of $2.9 million and $0.4 million as of September 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.

      The following table summarizes the change in the Company's restructuring
      accruals for the nine months ended September 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
                                         ----------       ----------
      Severance paid ..............           (12)              (177)
      Adjustments .................            --                 --
      Provisions for restructuring             --                 --
                                         ----------       ----------
      Balance at September 30, 2001           211         $    2,940
                                         ==========       ==========
</TABLE>

7.    On December 29, 2000, the Company secured a $15.0 million revolving credit
      facility with a term of nine months. Although the Company did not borrow
      any funds under this facility through its expiration in September 2001, it
      had 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. In September 2001, the Company obtained a
      replacement revolving credit facility in the amount of $20.0 million with
      a new lender. The new lender reissued the letter of credit in favor of the
      state of New York and, accordingly, the Company's borrowing capacity under
      the new facility was reduced to $16.0 million. Loans under the new
      facility will bear interest at either the applicable prime rate or the
      LIBOR rate plus a margin with such margin determined by reference to the
      Company's leverage ratio as defined in the loan documents. 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. This
      facility has a term of one year.

      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 Company subsequently
      requested that the amount available for borrowing under the facility be
      reduced to $1.5 million. The Company now uses the facility primarily for
      the purpose of issuing letters of credit in the ordinary course of
      business. At September 30, 2001 the aggregate value of outstanding letters
      of credit amounted to $1.0 million. These letters of credit are
      collateralized by the remaining $1.5 million time deposit account
      maintained with the issuer. This facility matures on September 30, 2002.
      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 third
      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%.



                                       9
<PAGE>
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 related information technology
      consulting, software development and business process outsourcing services
      and ATM deployment and management 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.

      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 accounted for more than 10% of total net revenue
      for the three and nine-month periods ended September 30, 2001. No single
      customer of the Company other than Deluxe accounted for more than 10% of
      total net revenues for the three and nine months ended September 30, 2000.
      Deluxe accounted for 13.1 and 14.5%, respectively, of the Company's total
      net revenue in these periods.

      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 and credits
      (e.g., restructuring charges, asset impairment charges, certain one-time
      charges that management believes are not reflective of on-going
      operations, etc.). Special credits in the third quarter of 2001 resulted
      from a $2.5 million net reduction in the Company's reserve for future
      losses on certain EBT contracts. 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. 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.
      Special charges in the third quarter of 2000 consisted of $1.3 million
      related to the Company's separation from Deluxe. The charges and credits
      on the EBT contracts were recorded in cost of revenue in the government
      services segment. The costs related to the closure of the Bothell
      operations and the separation from Deluxe were charged to selling general
      and administrative expenses in the payment systems and services segment.



                                       10
<PAGE>
<TABLE>
<CAPTION>
                                                    Quarter Ended September 30, 2001
                                                ----------------------------------------
                                                  Payment
                                                systems and    Government       Total
(dollars in thousands)                            services      services    Consolidated
                                                -----------    ----------   ------------
<S>                                             <C>            <C>          <C>
Total net revenues .........................      $121,818      $ 11,160      $132,978
Gross margin excluding special credits .....        51,286         5,146        56,432
Operating income excluding special credits .        14,421         4,381        18,802
Net special credits ........................            --         2,500         2,500
Gross margin including special credits .....        51,286         7,646        58,932
Operating income including special credits .        14,421         6,881        21,302
Depreciation and amortization expense ......        10,266            --        10,266
Segment assets .............................       397,228        20,064       417,292
Capital purchases ..........................         8,019            --         8,019
</TABLE>

<TABLE>
<CAPTION>
                                                    Quarter Ended September 30, 2000
                                                ----------------------------------------
                                                  Payment
                                                systems and    Government       Total
(dollars in thousands)                            services      services    Consolidated
                                                -----------    ----------   ------------
<S>                                             <C>            <C>          <C>
Total net revenues .........................      $ 92,760      $ 11,243      $ 104,003
Gross margin excluding special charges .....        37,133         3,395         40,528
Operating income excluding special charges .         5,370         2,347          7,717
Special charges ............................        (1,338)           --         (1,338)
Gross margin including special charges .....        37,133         3,395         40,528
Operating income (loss) including special
  charges .................................          4,032         2,347          6,379
Depreciation and amortization expense .....          7,719            --          7,719
Segment assets ............................        376,927        29,626        406,553
Capital purchases .........................         11,912            --         11,912
</TABLE>

<TABLE>
<CAPTION>
                                                   Nine Months Ended September 30, 2001
                                                 ----------------------------------------
                                                   Payment
                                                 systems and    Government       Total
(dollars in thousands)                             services      services    Consolidated
                                                 -----------    ----------   ------------
<S>                                              <C>            <C>          <C>
Total net revenues .........................      $ 350,561      $ 32,972     $ 383,533
Gross margin excluding net special items ...        136,907        12,898       149,805
Operating income excluding net special items         29,165        10,400        39,565
Net special items ..........................         (3,200)        2,500          (700)
Gross margin including net special items ...        136,907        15,398       152,305
Operating income including net special items         25,965        12,900        38,865
Depreciation and amortization expense ......         30,340            --        30,340
Capital purchases ..........................         22,327            --        22,327
</TABLE>

<TABLE>
<CAPTION>
                                                   Nine Months Ended September 30, 2000
                                                 ----------------------------------------
                                                   Payment
                                                 systems and    Government       Total
(dollars in thousands)                             services      services    Consolidated
                                                 -----------    ----------   ------------
<S>                                              <C>            <C>          <C>
Total net revenues .........................      $ 271,207      $ 34,021     $ 305,228
Gross margin excluding special charges .....        113,400        10,156       123,556
Operating income excluding special charges .         11,215         6,211        17,426
Special charges ............................         (4,212)       (9,700)      (13,912)
Gross margin including special charges .....        113,400           456       113,856
Operating income (loss) including special ..          7,003        (3,489)        3,514
charges
Depreciation and amortization expense ......         21,152            --        21,152
Capital purchases ..........................         27,935            --        27,935
</TABLE>



                                       11
<PAGE>
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        Nine Months Ended
                     September 30,           September 30,           September 30,
                 --------------------    --------------------    --------------------
                   2001        2000        2001        2000        2001        2000
                 --------    --------    --------    --------    --------    --------
<S>              <C>         <C>         <C>         <C>        <C>          <C>
United
  States ....    $123,844    $ 97,398    $353,794    $285,922    $ 61,640    $ 65,633
United
  Kingdom ...       3,393       4,254      12,736      12,650       1,777       1,965
India .......       5,741       2,351      17,003       6,656       8,288       4,850
Other foreign
  countries .          --          --          --          --          28          37
                 --------    --------    --------    --------    --------    --------
Total .......    $132,978    $104,003    $383,533    $305,228    $ 71,733    $ 72,485
                 ========    ========    ========    ========    ========    ========
</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.

      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 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
      total impact the foregoing requirements will have on its consolidated
      balance sheet and statement of operations. Goodwill amortization for the
      third quarter of 2001 and the first nine months of 2001 amounted to
      approximately $1.0 million and $3.0 million, respectively.

      In October 2001, the FASB issued FAS 144, Accounting for the Impairment or
      Disposal of Long-Lived Assets. Statement 144 requires that long-lived
      assets be measured at the lower of carrying amount or fair value less cost
      to sell, whether reported in continuing operations or in discontinued
      operations. The standard is effective for 2002 and generally is to be
      applied prospectively. The implementation of this standard is not expected
      to have a material impact on the Company's financial position or results
      of operations.

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 September 30, 2001 was $9.6 million.


                                       12
<PAGE>
12.  Restatement/Subsequent events

     Subsequent to the issuance of the Company's consolidated financial
     statements as of and for the three and nine months ended September 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 being 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, and had also previously
     recorded in the three months ended September 30, 2001, revenues of $2.4
     million for payments received from ACI and $3.2 million in costs of revenue
     for payments made to ACI and the owner of the remaining equity interests of
     ACI, all such payments made in accordance with the two agreements.

     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 of 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 have been accounted
     for as advances and repayments with the net amount being an increase or
     decrease to the purchase price for the Company's acquisition of the
     remaining equity interests in ACI, rather than as revenues and expenses.
     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:

<TABLE>
<CAPTION>
                                                 September 30, 2001
                                            ----------------------------
                                            As Previously         As
(dollars in thousands)                         Reported        Restated
                                            -------------     ----------
<S>                                         <C>               <C>
Cash and cash equivalents ..............      $   85,865      $   85,865
Accounts receivable, net ...............         100,873          99,556
Total current assets ...................         231,620         230,303
Long-term investments ..................          18,104          18,453
Total non-current assets ...............         186,640         186,989
Total assets ...........................         418,260         417,292

Accrued other liabilities ..............          32,927          32,542
Total current liabilities ..............          93,826          93,441
Stockholders' equity ...................      $  323,884      $  323,301
</TABLE>

                                       13
<PAGE>
<TABLE>
<CAPTION>
                                                                                      Quarter ended September 30,
                                                                                                   2001
                                                                                     -----------------------------
                                                                                     As Previously         As
(dollars and shares in thousands except per share amounts)                             Reported          Restated
                                                                                     -------------      ----------
<S>                                                                                  <C>                <C>
Net Revenue .....................................................................      $  135,353       $  132,978
                                                                                       ----------       ----------
  Cost of revenue, excluding loss contract and asset impairment charges (credits)          79,746           76,546
  Loss contract and asset impairment charges (credits) ..........................          (2,500)          (2,500)
                                                                                       ----------       ----------
  Total cost of revenue .........................................................          77,246           74,046
                                                                                       ----------       ----------
Gross Margin ....................................................................          58,107           58,932
  Selling, general and administrative expense ...................................          37,630           37,630
                                                                                       ----------       ----------
  Income from operations ........................................................          20,477           21,302
Other Income (Expense)
  Interest expense ..............................................................             (99)             (99)
  Interest and other income (expense) ...........................................               2             (163)
                                                                                       ----------       ----------
Income before income taxes ......................................................          20,380           21,040
Provision for income taxes ......................................................          (7,133)          (7,395)
                                                                                       ----------       ----------
Net income ......................................................................      $   13,247       $   13,645
                                                                                       ==========       ==========

Weighted average shares:
  Basic .........................................................................          46,248           46,248
                                                                                       ==========       ==========
  Diluted .......................................................................          48,030           48,030
                                                                                       ==========       ==========

Earnings per share
  Basic .........................................................................      $     0.29       $     0.30
                                                                                       ==========       ==========
  Diluted .......................................................................      $     0.28       $     0.28
                                                                                       ==========       ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                                      Nine months ended September
                                                                                                30, 2001
                                                                                     -----------------------------
                                                                                     As Previously          As
(dollars and shares in thousands except per share amounts)                              Reported         Restated
                                                                                     -------------      ----------
<S>                                                                                  <C>                <C>
Net Revenue .....................................................................      $  388,050       $  383,533
                                                                                       ----------       ----------
  Cost of revenue, excluding loss contract and asset impairment charges (credits)         236,928          233,728
  Loss contract and asset impairment charges (credits) ..........................          (2,500)          (2,500)
                                                                                       ----------       ----------
  Total cost of revenue .........................................................         234,428          231,228
                                                                                       ----------       ----------
Gross Margin ....................................................................         153,622          152,305
                                                                                       ----------       ----------
  Selling, general and administrative expense ...................................         113,440          113,440
                                                                                       ----------       ----------
  Income from operations ........................................................          40,182           38,865
Other Income (Expense)
  Interest expense ..............................................................            (598)            (575)
  Interest and other income (expense) ...........................................             799            1,128
                                                                                       ----------       ----------
Income before income taxes ......................................................          40,383       $   39,418
Provision for income taxes ......................................................         (14,334)         (13,952)
                                                                                       ----------       ----------
Net income ......................................................................      $   26,049       $   25,466
                                                                                       ==========       ==========

Weighted average shares:
  Basic .........................................................................          45,850           45,850
                                                                                       ==========       ==========
  Diluted .......................................................................          47,525           47,525
                                                                                       ==========       ==========

Earnings per share:
  Basic .........................................................................      $     0.57       $     0.56
                                                                                       ==========       ==========
  Diluted .......................................................................      $     0.55       $     0.54
                                                                                       ==========       ==========
</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.


                                       14
<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 September 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 $17.3 million at
September 30, 2001.

We previously agreed to make up to $35 million of cash available for supplying
ATMs managed by ACI and had supplied $20.5 million of cash for this purpose as
of September 30, 2001. This cash is classified as current restricted cash in the
accompanying balance sheet. We also agreed to guarantee up to $3.0 million
(Canadian) face value of equipment leases for ACI's Canadian customers and
through September 30, 2001 guaranteed lease payments amounting to $1.2 million.
Through September 30, 2001 we had not been required to make any payments
pursuant to these guarantees.

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 obligation 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 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.



                                       15
<PAGE>
Subsequent to the issuance of our consolidated financial statements as of and
for the three and nine months ended September 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 being 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, and had also previously
recorded in the three months ended September 30, 2001, revenues of $2.4 million
for payments received from ACI and $3.2 million in costs of revenue for
payments made to ACI and the owner of the remaining equity interests of ACI,
with all such payments made in accordance with the two agreements.

In February 2002, in response to questions raised by a former ACI employee
regarding the accounting for the Amendment Agreement, we conducted a review of
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 have
been accounted for as advances and repayments with the net amount being an
increase or decrease to the purchase price for our acquisition of the remaining
equity interests in ACI, rather than as revenues and expenses. 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.




                                       16
<PAGE>
RESULTS OF OPERATIONS - QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2001
COMPARED TO QUARTER AND NINE MONTHS ENDED SEPTEMBER 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>
                                                                      Quarter Ended        Nine Months Ended
                                                                      September 30,           September 30,
                                                                  --------------------    --------------------
                                                                    2001        2000        2001        2000
                                                                  --------    --------    --------    --------
<S>                                                               <C>         <C>         <C>         <C>
Net revenue
  Payment systems and services .............................        91.6%       89.2%       91.4%       88.9%
  Government services ......................................         8.4        10.8         8.6        11.1
                                                                  --------    --------    --------    --------
    Total net revenues .....................................       100.0       100.0       100.0       100.0
                                                                  --------    --------    --------    --------

Cost of revenue
  Payment systems and services .............................        53.0        53.5        55.7        51.7
  Government services
   Cost of revenue excluding loss contract charges/(credits)         4.6         7.5         5.2         7.8
    Loss contract and asset impairment charges/(credits) ...        (1.9)       --          (0.6)        3.2
                                                                  --------    --------    --------    --------
      Total cost of revenue ................................        55.7        61.0        60.3        62.7
                                                                  --------    --------    --------    --------

Gross margin ...............................................        44.3        39.0        39.7        37.3
                                                                  --------    --------    --------    --------

Selling, general and administrative expense ................        28.3        32.9        29.6        36.1
                                                                  --------    --------    --------    --------

Income from operations .....................................        16.0         6.1        10.1         1.2
                                                                  --------    --------    --------    --------

Other income (expense)
  Interest expense .........................................        (0.1)       (0.4)       (0.1)       (0.7)
  Interest and other income (expense) ......................        (0.1)        0.9         0.3         0.3
                                                                  --------    --------    --------    --------

Income before income taxes .................................        15.8         6.6        10.3         0.8

Provision for income taxes .................................        (5.5)       (2.9)       (3.7)       (0.6)
                                                                  --------    --------    --------    --------

Net income .................................................        10.3%        3.7%        6.6%        0.2%
                                                                  ========    ========    ========    =========
</TABLE>

NET REVENUE - Net revenue increased $29.0 million, or 27.9%, to $133.0 million
in the third quarter of 2001 from $104.0 million in the third quarter of 2000.
Net revenue increased $78.3 million, or 25.7%, to $383.5 million for the first
nine months of 2001 from $305.2 million in the first nine months of 2000.

Payment systems and services net revenue increased $29.0 million, or 31.3%, to
$121.8 million in the third quarter of 2001 from $92.8 million in the third
quarter of 2000. Net revenue of this segment increased $79.4 million, or 29.3%,
to $350.6 million for the first nine months of 2001 from $271.2 million in the
first nine months of 2000.

The primary drivers of our revenue growth for the third quarter of 2001 were the
licensing of our EFT software to Concord EFS, which represents our largest
software licensing transaction to date, the ATM management and deployment
agreement with ACI that we entered into in September 2000 and the contract with
West Corporation under which we commenced operations in the fourth quarter of
2000. These factors, as well as, to a lesser degree, increased transaction
processing volumes from existing customers, increased sales of products and
services based on our DebitBureau(R) database as well as increased usage of our
debit account opening products also contributed to our revenue growth over the
comparable nine month period in 2000. The revenue increases for the quarter and
the nine months ended September 30, 2001 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 a decrease in revenue earned from Deluxe.



                                       17
<PAGE>
Concord EFS has notified us that it intends to terminate its processing
agreement with us for the STAR debit network and to perform this processing at
its own data centers. As part of the transition of this activity, Concord EFS
licensed our EFT software and contracted for the long-term maintenance thereof
and for professional services support to assist in the migration effort. This
transition is currently scheduled to be completed by the fourth quarter of 2002.
Concord EFS will pay us fixed monthly fees for the processing we perform for the
STAR network during the transition period and we expect to see the revenues from
this relationship decline from historical levels in future periods.

Deluxe has been, and is expected to continue to be, one of our most significant
customers. During the third quarter of 2001, total net revenue from Deluxe was
$9.3 million, or 7.0% of our total net revenue, compared to $13.6 million, or
13.1% of our total net revenues in the third quarter of 2000. For the first
three quarters of 2001, total net revenue from Deluxe was $35.8 million, or 9.3%
of our total net revenue, compared to $44.1 million, or 14.5% of our total net
revenue, in the first three quarters of 2000. Of the $35.8 million of revenue
earned from Deluxe so far this year, $30.7 million was for software development,
$4.9 million was for business process outsourcing and the remainder was for
payment processing. At present, we believe Deluxe will spend approximately $41
million for software development services with us for all of 2001. This amount
is $2.0 million less than the $43 million annual minimum-spending target for
such services specified in our software development and outsourcing agreement
with Deluxe. If Deluxe fails to meet the minimum spending target, we will be
entitled to receive a payment from Deluxe for the estimated profits on the
revenue shortfall as set forth in the agreement. Such shortfall payment, if any
is required, is not expected to be material to the results of our operations. We
expect Deluxe to spend between $7 - $8 million with us in 2001 for business
process outsourcing services. Based on recent communications with Deluxe, we
believe that Deluxe presently plans to purchase a sufficient amount of software
development services from us in 2002 to achieve or slightly exceed the $43
million annual minimum spending target in 2002.

Effective October 1, 2001 we acquired (the Acquisition) the remaining equity
interests in ACI for a purchase price of approximately $42.6 million, of which
approximately $38.3 million was paid in cash. Payment of the balance of the
purchase price of $4.3 million is subject to the satisfaction of certain
post-closing conditions. As a result of the acquisition, ACI has become a
wholly-owned subsidiary and its balance sheets and statements of operations will
now be consolidated with ours. In addition, the ATM management and deployment
agreement will be of no further effect. We do not expect that the Acquisition
will have a material impact on our reported revenue this year due to the effect
of the previous ATM management and deployment agreement with ACI, nor do we
expect the Acquisition to have a material impact on our publicly stated
expectations regarding our fourth quarter results of operations.

ACI had been operating at a loss in prior periods. A major objective of the
Acquisition is to improve its financial performance in 2002 and beyond. We
expect improvement in the ACI business to come from four major sources: (i)
reduced operating costs through the integration of sales, marketing, operations
and facilities, (ii) the elimination of processing fees for more than 5,000 of
ACI's ATMs that are currently paid by ACI to Concord EFS, USPI and Metavante by
processing these transactions at our data centers, (iii) the redeployment of
under-performing or idle ATMs and (iv) higher branding revenues from existing
and new branding customers. We currently expect that the Acquisition will be
accretive in 2002.

The Acquisition is also part of a strategy to increase our core transaction
processing revenue base through the acquisition and control of ATM transactions
at the point of origination. We may pursue the acquisition of the ATM portfolios
of other independent ATM deployment and management companies.



                                       18
<PAGE>
Government services net revenue was approximately $11.2 million in both the
third quarter of 2001 and 2000. Net revenue decreased $1.0 million, or 2.9%, to
$33.0 million for the first nine months of 2001 from $34.0 million in the first
nine months of 2000. The decrease in revenue for the first nine months of 2001
compared to the first nine months of 2000 was primarily due to the expiration of
an electronic benefit-switching contract in the third 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, we expect to see a decline in the revenues of the government
services segment in 2002 if our Medicaid eligibility verification contract with
the state of New York expires. This contact has historically provided us
approximately $11.0 million in annual revenue was previously scheduled to expire
at the end of October 2001. New York has extended this agreement through April
2002, with a possibility of further extensions.

COST OF REVENUE - Cost of revenue increased $10.5 million, or 16.5%, to $74.0
million in the third quarter of 2001 from $63.5 million in third quarter of
2000. Cost of revenue increased $39.8 million, or 20.8%, to $231.2 million in
the first nine months of 2001 from $191.4 million in the first nine months of
2000. As a percentage of revenue, cost of revenue was 55.7% for the third
quarter of 2001 compared to 61.0% for the third quarter of 2000. For the first
nine months of 2001, cost of revenue, as a percentage of revenue, was 60.3%
compared to 62.7% for the first nine months of 2000. Excluding a net credit of
$2.5 million and charge of $9.7 million to our reserve for future losses on
certain government EBT contracts recorded in the third quarter of 2001 and the
second quarter of 2000, respectively, cost of revenue as a percentage of revenue
was 60.9% for the first nine months of 2001 and 59.5% for the first nine months
of 2000.

Payment systems and services cost of revenue increased by $14.9 million, or
26.8%, to $70.5 million in the third quarter of 2001 from $55.6 million in the
third quarter of 2000. Cost of revenue increased by $55.9 million, or 35.4%, to
$213.7 million in the first nine months of 2001 from $157.8 million in the first
nine months of 2000. As a percentage of segment revenue, cost of revenue was
57.9% for the third quarter of 2001 compared to 59.9% for the third quarter of
2000. For the first nine months of 2001, cost of revenue as a percentage of
segment revenue was 61.0% compared to 58.2% for the first nine 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 approximated the associated
net revenue. Costs associated with the opening of the new call center in Mumbai,
India also contributed to the increase in cost of revenue over both the third
quarter and first nine months of last year. Additionally, cost of revenue in the
payment systems and services segment has increased as a result of costs
associated with the introduction of newer products and services.

Government services cost of revenue decreased $4.3 million, or 55.1%, to $3.5
million in the third quarter of 2001 from $7.8 million in the third quarter of
2000. Cost of revenue decreased $16.0 million, or 47.6%, to $17.6 million in the
first nine months of 2001 from $33.6 million in the first nine months of 2000.
As a percentage of segment revenue, cost of revenue was 31.3% for the third
quarter of 2001 compared to 69.6% for the third quarter of 2000. For the first
nine months of 2001, cost of revenue as a percentage of segment revenue was
53.3% compared to 98.9% for the first nine months of 2000.

Excluding a net credit of $2.5 million recognized in the third quarter of 2001
related to a reduction in our estimate of future losses on certain government
EBT contracts, cost of revenue decreased $1.8 million or 23.1% in the third
quarter of 2001 from the third quarter of 2000. Excluding this net credit, cost
of revenue was 53.9% of segment revenue in the third quarter of 2001. Excluding
both this net credit and a net charge of $9.7 million for future losses on
certain government EBT contracts recognized in the second quarter of 2000, cost
of revenue as a percentage of revenue was 60.9% for the first nine months of
2001 compared to 70.2% for the first nine months of 2000.

The reduction in cost of revenue exclusive of net special charges and credits
for both the quarter and nine months ended September 30, 2001 compared to the
same periods in the prior year is a reflection of continuing efforts to reduce
the cost of supporting this business and a reduction in costs due to the
expiration of an electronic benefit switching contract in the third quarter of
2000.



                                       19
<PAGE>
GROSS MARGIN - Gross margin increased by $18.4 million, or 45.4%, to $58.9
million in the third quarter of 2001 from $40.5 million in the third quarter of
2000. Gross margin increased by $38.4 million, or 33.7%, to $152.3 million in
the first nine months of 2001 from $113.9 million in the first nine months of
2000. As a percentage of revenue, gross margin was 44.3% for the third quarter
of 2001 compared to 39.0% for the third quarter of 2000. Excluding a net credit
of $2.5 million related to our estimates of future losses on certain government
EBT contracts, gross margin in the third quarter of 2001 was 42.4%. Excluding
net credits of $2.5 million and net charges of $9.7 million related to revisions
of our estimates of future losses on certain government EBT contracts recorded
in the third quarter of 2001 and the second quarter of 2000, respectively, gross
margin as a percentage of revenue was 39.1% for the first nine months of 2001
compared with 40.5% for the first nine months of 2000.

The increase in gross margin as a percentage of net revenue in the third quarter
of 2001 over the third quarter of 2000 is primarily due to increased software
sales as software is among our highest margin product lines. Historically,
software sales have accounted for between 8% and 12%, of revenue and we expect a
similar contribution for 2001. The new call center operation in Mumbai, India
also had a positive effect on gross margins in the third quarter of 2001
compared to the third quarter of 2000. The ATM management and deployment
agreement also made a slightly positive contribution to gross margin in the
third quarter of 2001.

The decrease in gross margin when comparing the nine months ended September 30,
2001 to the nine months ended 2000 reflects the negative impact of the ATM
management and deployment agreement which is included in our results for the
full nine months of 2001 compared with only one month in 2000. The introduction
of new products and services that have not yet generated sufficient revenue to
contribute positively to gross margin and the underutilization of personnel
allocated to our software development and business process outsourcing agreement
with Deluxe also contributed to the decrease in gross margin.

SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES - SG&A expense increased by
$3.5 million, or 10.3%, to $37.6 million in the third quarter of 2001 from $34.1
million in the third quarter of 2000. SG&A expense increased by $3.1 million, or
2.8%, to $113.4 million in the first nine months of 2001 from $110.3 million in
the first nine months of 2000. As a percentage of revenue, SG&A expense was
28.3% for the third quarter of 2001 compared to 32.9% for the third quarter of
2000. For the first nine months of 2001, SG&A expense as a percentage of revenue
was 29.6% compared to 36.1% for the first nine months of 2000.

Excluding a charge of $1.3 million for costs related to our separation from
Deluxe, SG&A expense as a percentage of revenue was 31.6% in the third quarter
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 charges of $4.2 million taken in the second and third
quarters of 2000 related to separation costs from Deluxe, SG&A expense as a
percentage of revenue was 28.7% for the first nine months of 2001 compared to
34.8% for the first nine months of 2000.

The absolute increase in SG&A expense in both the third quarter and nine month
periods over the comparable periods last year is primarily related to our
growth, increased hosting costs associated with our DebitBureau database and
costs to support the demands associated with becoming a public company. These
increases were offset somewhat by lower levels of spending in 2001 for promotion
and advertising.

OTHER INCOME (EXPENSE) - Other expense was $0.3 million during the third quarter
of 2001 compared to other income of $0.5 million for the third quarter of 2000.
For the first nine months of 2001, other income was $0.6 million compared to
other expense of $1.3 million for the first nine 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
losses 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


                                       20
<PAGE>
primary driver of the decrease in other expense is the absence of interest due
to Deluxe on intercompany balances in 2001.

PROVISION FOR INCOME TAXES - The provision for income taxes was $7.4 million in
the third quarter of 2001 compared to $3.0 million in the third quarter of 2000
resulting in effective tax rates of 35.1% and 43.4%, respectively. The effective
tax rate for the first nine months of 2001 was 35.4% compared to 76.0% for the
first nine months of 2000. During the third quarter of 2001, the effective tax
rate for 2001 was reduced from 35.7% to 35.4%. This rate reduction was obtained
as a result of 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 September 30, 2001,
cash and cash equivalents were $85.9 million. We had $1.7 million of restricted
cash that we temporarily hold in custodial accounts on behalf of clients and had
supplied $20.5 million in restricted cash to ATMs deployed by us and managed by
ACI. We have agreed to make up to $35 million available for this purpose as of
September 30, 2001. We had also agreed to guarantee up to $3.0 million
(Canadian) face value of equipment leases for Canadian customers of ACI and
through September 30, 2001 we guaranteed lease payments amounting to $1.2
million. No payments were made by us pursuant to this guarantee.

Our 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. We subsequently
requested that the amount available for borrowing under the facility be reduced
to $1.5 million. We now use the facility primarily for the purpose of issuing
letters of credit in the ordinary course of business. At September 30, 2001 the
aggregate value of outstanding letters of credit amounted to approximately $1.0
million. These letters of credit are collateralized by the remaining $1.5
million time deposit account maintained with the issuer. This facility matures
on September 30, 2002. 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 third quarter of 2001, although we issue letters of credit in the
ordinary course of business under this facility.

We obtained a $15.0 million revolving credit facility on December 29, 2000. This
facility had a term of nine months and expired in September 2001. Although we
did not borrow any funds under this facility through its expiration, 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. In September 2001, we obtained a replacement revolving credit facility
in the amount of $20.0 million with a new lender. The new lender reissued the
letter of credit in favor of the state of New York and, accordingly, our
borrowing capacity under the new facility was reduced to $16.0 million. Loans
under the new facility will bear interest at either the applicable prime rate or
the LIBOR rate plus a margin, with such margin determined by reference to our
leverage ratio as defined in the loan documents. 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. This
facility has a term of one year.

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 September 30, 2001 was $9.6 million.



                                       21
<PAGE>
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
                                                Nine Months Ended
                                                   September 30,
                                              ----------------------
(dollars in thousands)                          2001          2000
                                              --------      --------
<S>                                           <C>           <C>
Cash provided by operating activities ...     $ 19,271      $ 31,842
Cash used in investing activities .......      (14,956)      (57,261)
Cash provided by financing activities ...        2,819        82,548
Adjustment for lag in financial reporting           --        (4,127)
                                              --------      --------
Net increase in cash and cash equivalents     $  7,134      $ 53,002
                                              ========      ========
</TABLE>

Cash flows from operating activities were $19.3 million and $31.8 million for
the nine months ended September 30, 2001 and 2000, respectively. The decrease in
operating cash flow is primarily the result of an increase in accounts
receivable to $99.6 million at September 30, 2001 from $57.8 million at December
31, 2000. This increase is reflective of our revenue growth, a change in the way
we process our billings to and from Deluxe Corporation and the software sale to
Concord EFS near the end of the third quarter. Prior to the Spin-Off, all
billing activity with Deluxe Corporation was settled through a single
inter-company account. Subsequent to the Spin-Off, we send Deluxe invoices which
are recorded as receivables. Excluding the Concord EFS software transaction and
the effect of our change in billing methods with Deluxe, days sales in accounts
receivable has improved from where it stood at September 30, 2000.

Cash used in investing activities was $15.0 million for the nine months ended
September 30, 2001. The investments primarily relate to purchases of fixed
assets and expenditures for software partially offset by the return of $8.5
million of the $10.0 million that we had placed in a time deposit account as
collateral to support our guarantee of our Indian credit facility. The remaining
$1.5 million remains in deposit with the lender as collateral for letters of
credit issued under this facility. Cash used in investing activities was $57.3
million for the nine months ended September 30, 2000 and primarily relates to
the investment of $20.0 million to purchase a 24% interest in ACI, a $10.0
million investment in a time deposit to secure our India credit facility and
purchases of capital assets and software investments of $27.9 million.

Cash provided from financing activities was $2.8 million for the nine months
ended September 30, 2001. We used cash to repay debt of $6.9 million, including
the repayment of $5.3 million outstanding under our Indian credit facility. In
addition, proceeds from the exercise of stock options and shares purchased
through our employee stock purchase plan provided cash of $9.8 million. Cash
provided from financing activities was $82.5 million for the nine months ended
September 30, 2000. We completed our IPO in June 2000, generating proceeds of
$64.5 million. In addition, Deluxe provided $10.1 million to increase the
capitalization of the Company in preparation for the Spin-Off and we had net
borrowings of approximately $8.0 million.

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.

In October 2001, we used $38.3 million from our existing cash reserves to fund
our acquisition of the remaining equity interests in ACI. We believe that cash
generated from operations, borrowings under available credit facilities and our
unrestricted cash balance will provide sufficient funds for our operations for
the foreseeable future.


                                       22
<PAGE>
FORWARD LOOKING STATEMENTS - The Company has confirmed the Street consensus view
for fourth quarter:

   -  Fourth quarter basic and diluted earnings per share are projected to be
      approximately $0.30 and $0.29, respectively;

   -  Fourth quarter revenue is expected to approximate $140 - $145 million.

The Company's previously announced outlook for the balance of 2001 and 2002 is
as follows:

   -  In light of the unprecedented uncertainty of current political and
      economic conditions, the Company has indicated that it expects revenue
      growth in the range of 15 to 20 percent for 2002. The Company remains
      confident with revenue growth in the 20 percent range longer term, but
      will continue to evaluate the circumstances and provide more specific
      guidance for 2002 in a few months.

   -  Operating income is expected to be approximately 13 to 15 percent of
      revenue (excluding special items).

   -  The effective tax rate is expected to be 35 percent.

   -  Net income is expected to increase at least 45 percent year over year
      (excluding special items, but including the beneficial impact of adopting
      SFAS 142).

   -  Capital spending is targeted at $40 to $50 million, reflecting product
      development and enhancement costs, customer service improvements and data
      center consolidation initiatives, as well as infrastructure needs to
      support continued growth and expansion of our ATM network.

   -  The Company expects to enter 2002 with more than 86% of its 2001 revenues
      under long-term contracts.

   -  Regarding the Company's revenue mix by product group, the Company expects
      the following mix for this year: transaction processing, 43%; risk
      management and decision support, 30%; and professional services, which
      includes all software sales, 27%. Actual performance through three
      quarters, including the EFT software sale to Concord EFS, is as follows:
      transaction processing, 44.7%; risk management & decision support 28.5%;
      professional services, 26.8%.

   -  EFT software sales have historically accounted for 8 to 12% of total
      revenues. Software revenues, including the recent sale to Concord EFS, are
      expected to remain in the same range in 2001 and 2002.

   -  The Company's projected 45% net income growth for 2002 includes
      approximately $4 million of benefit from SFAS 142, which is estimated to
      add $.08 to $.09 per share to EPS for the year. Without the SFAS benefit,
      net income is expected to grow approximately 33%. The currently projected
      45% growth in net income is based on achieving the low end of the targeted
      15-20% range of revenue growth year-over-year. The Company expects
      additional improvement in net income if revenues approach the higher end
      of this targeted revenue range.

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. This pronouncement has 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
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 total impact the foregoing requirements will have on our consolidated
balance sheet and statement of operations. Goodwill


                                       23
<PAGE>
amortization for the third quarter of 2001 and the first nine months of 2001
amounted to approximately $1.0 million and $3.0 million, respectively.

In October 2001, the FASB issued FAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. Statement 144 requires that long-lived assets be
measured at the lower of carrying amount or fair value less cost to sell,
whether reported in continuing operations or in discontinued operations. The
standard is effective for 2002 and generally is to be applied prospectively. The
implementation of this standard is not expected to have a material impact on the
company's financial position or results of operations.

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.









                                       24
<PAGE>
                           PART II - OTHER INFORMATION


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 September 30, 2001
for the purposes shown:

<TABLE>
<S>                                                                <C>
Infrastructure and cost savings initiatives ..................     $18,500,000*
Product development expenditures .............................      11,200,000*
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) ...................      13,456,370
                                                                   -----------
    Total ....................................................     $64,459,370
                                                                   ===========
</TABLE>

  *Estimated





                                       25
<PAGE>
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.

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.


                                       26
<PAGE>
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 will likely continue processing for STAR
through the third quarter of 2002, we expect that the revenues we receive from
this relationship will decline as the migration proceeds.

OUR ACQUISITION OF ACI MAY NOT BE SUCCESSFUL.

In October 2001, we acquired the remaining equity interests in Access Cash
International, L.L.C. ("ACI"), a limited liability company in which we
previously held a 24% interest. ACI is the second largest independent ATM
service provider in the United States, with over 8,400 owned or managed ATMs.
ACI provides turnkey ATM deployment solutions, including ATM sales and
management as well as branding and advertising services. ACI's revenues are
received from the fees paid by consumers utilizing the deployed ATM machines and
interchange fees paid by their banks and from the sale of ATMs.

In recent years, ACI has operated at a loss. Continued improvement in the future
will depend upon our ability to effectively integrate ACI's operations into our
organization, 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. If we are
not successful in our effort to improve the revenues and profitability of ACI,
our future results of operations will be adversely affected. 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. In addition, regulations are currently being considered
regarding the application of the Americans with Disabilities Act to ATM
networks. Although any regulations could result in increased opportunities for
ATM sales by us, they could also require us to retire or retrofit portions of
the ATM base we own. It is also possible that existing ATM networks will be
exempted from any future regulations. As a result we are unable at this time to
determine whether, and to what extent, any final regulations will impact our
business.





                                       27
<PAGE>
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
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.



                                       28
<PAGE>
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, unlawful acts, 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.

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.




                                       29
<PAGE>
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.

WE ARE DEPENDENT ON DELUXE FOR A SIGNIFICANT PORTION OF OUR REVENUE.

In the first nine months of 2001, net sales to Deluxe represented 9.3% of our
total net revenues. On a year-over-year basis, however, total revenues from
Deluxe declined by 18.8% to $35.8 million during the first three quarters of
2001 from $44.1 million in the first three quarters of 2000. Although Deluxe has
established minimum spending targets of $43 million per year through March 31,
2005 for software development, maintenance and other support services from us
and has indicated that it expects to purchase services from us in 2002 at
approximately this level, 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.






                                       30

<PAGE>
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, Dr.
Nikhil Sinha, our Executive Vice President, Business Enterprise Group and Paul
W. Finch, our Executive Vice President, Global Customer Care. The loss of the
technical knowledge and industry expertise of any of these officers could
seriously harm our business.

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, including through our acquisition
of ACI, 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.



                                       31

<PAGE>
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 nine months of 2001, we
generated approximately 7.8% 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.

WE MAY FACE COLLECTION RISKS ON SOME PAYMENTS.

We plan to introduce a check guarantee program 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


                                       32

<PAGE>
estimates underlying 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 8.4% of our net sales in the
third 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 has been extended through April 2002. The
minimum annual revenue from this contract is $11.3 million. New York has the
option to further extend this contract on a month-to-month basis after April
2002. There can be no assurance that New York will exercise any of its extension
options.

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.



                                       33

<PAGE>
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 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.



                                       34

<PAGE>
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.





                                       35

<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        Interest Purchase Agreement, dated as of August 31, 2001 by and between           *
              eFunds Corporation and ATM Holding, Inc. (incorporated by reference to
              Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with
              the Securities and Exchange Commission (the "Commission") on October 24,
              2001)

   3.1        Amended and Restated Certificate of Incorporation (incorporated by                *
              reference to Exhibit 3.1 to the Registration Statement on Form S-1 (the
              "S-1") filed by the Company with the Commission on April 4, 2000,
              Registration No. 333-33992).

   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)

   10.4       Change in Control Agreement between the Company and Paul W. Finch.                *
              (incorporated by reference to the Company's Quarterly Report on Form
              10-Q for the quarter ended September 30, 2001)
</TABLE>

*Incorporated by reference


(b) Reports on Form 8-K:

    None



                                       36

<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 hereunto 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)






                                       37

<PAGE>
INDEX TO EXHIBITS

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



</TABLE>









                                       38