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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

(Mark One)

|  |  |                                                                                        
|- |  | ---------------------------------------------------------------------------------------
|þ |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002
OR

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | 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
(State or other jurisdiction of incorporation or organization)                                          |  | 39-1506286
(IRS Employer Identification Number)
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Gainey Center II
8501 N. Scottsdale Road, Suite 300
Scottsdale, Arizona
(Address of principal executive offices) |  | 85253
(Zip Code)                               

Registrants telephone number, including area code: (480) 629-7700

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   þ   No   o

The

number of shares outstanding of the registrants common stock, par value $.01 per share, at November 7, 2002 was 46,666,388.

This report on Form 10-Q does not contain the disclosures required by Part I, Items 1, 2, 3, of Form 10Q



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|                               |                                          |  |  |  |  |  |  | 
|------------------------------ | ---------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|PART II  OTHER INFORMATION   
|                               | ITEM 1. LEGAL PROCEEDINGS               
|                               | ITEM 5. OTHER INFORMATION               
|                               | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
|SIGNATURES                    
|EX-2.2                        
|EX-10.1                       
|EX-10.2                       
|EX-10.3                       



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PART I  FINANCIAL INFORMATION

In October 2002, the Company announced that it is reviewing the accounting
treatment given to various transactions that occurred in 2000 and 2001 and
certain tax matters related to the Companys India based operations. The scope
of the review includes a $5.0 million data license agreement that was entered
into in the second quarter of 2000 and $6.2 million of data license sales that
occurred in the second quarter of 2001. The review also encompasses the
appropriateness of the accounting for certain transactions with the STAR
network which generated an aggregate of approximately $30 million in revenues
in 2001 and the first nine months of 2002 and certain tax matters related to
the Companys India operations. The possible impact of the tax issues under
consideration is not subject to reasonable estimation, although it does not
appear likely that the impact on the Companys tax liabilities could exceed $5
million under any scenario. The timing of the recognition of revenues
associated with approximately $1.3 million of software sales by the Companys
subsidiary in the United Kingdom in the first and second quarters of 2001 is
also being considered. Issues being considered as part of the review include
assessing whether revenues recognized in earlier periods should be
deferred and recognized over later periods, whether certain revenues should
be treated as a reduction in operating expenses and the timing of the
recognition of certain expenses. Pending completion of this
review, the Companys financial statements cannot be
completed because the Company is unable to reasonably estimate the effect of
any adjustments to the Companys prior financial results that may be necessary.
The Company is in the process of finalizing the conclusions reached by it as a
result of the review and will seek to complete its efforts as expeditiously as
possible, although the Company cannot provide definitive guidance as to when
the review process will be finally concluded.




PART II  OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

On March 8, 2002, we received a letter from the Securities and Exchange
Commission (the SEC) stating that the SEC is conducting an inquiry of us and
requesting our voluntary assistance in connection with the provision of certain
documents relating to our 2001 financial results and certain transactions
between us and Access Cash International L.L.C., among other things. The letter
from the SEC states that the inquiry is non-public and that it should not be
construed as an indication that the SEC believes any violation of law has
occurred.

In October 2002, the Company announced that it is reviewing the accounting
treatment given to various transactions that occurred in 2000 and 2001 and
certain tax matters related to the Companys India based operations. The scope
of the review includes a $5.0 million data license agreement that was entered
into in the second quarter of 2000 and $6.2 million of data license sales that
occurred in the second quarter of 2001. The review also encompasses the
appropriateness of the accounting for certain transactions with the STAR
network which generated an aggregate of approximately $30 million in revenues
in 2001 and the first nine months of 2002 and certain tax matters related to
the Companys India operations. The possible impact of the tax issues under
consideration is not subject to reasonable estimation, although it does not
appear likely that the impact on the Companys tax liabilities could exceed $5
million under any scenario. The timing of the recognition of revenues
associated with approximately $1.3 million of software sales by the Companys
subsidiary in the United Kingdom in the first and second quarters of 2001 is
also being considered. Issues being considered as part of the review include
assessing whether revenues recognized in earlier periods should be
deferred and recognized over later periods, whether certain revenues should
be treated as a reduction in operating expenses and the timing of the
recognition of certain expenses. Pending completion of this
review, the Companys financial statements cannot be
completed because the Company is unable to reasonably estimate the effect of
any adjustments to the Companys prior financial results that may be necessary.
The Company is in the process of finalizing the conclusions reached by it as a
result of the review and will seek to complete its efforts as expeditiously as
possible, although the Company cannot provide definitive guidance as to when
the review process will be finally concluded.

The SEC staff has requested additional information related to certain of the
matters subject to the current review by the Company and the Company intends to
cooperate fully with this request. We may, however, be the subject of
additional inquiries or become subject to a fine or other liabilities.




ITEM 5. OTHER INFORMATION

RISK FACTORS AND CAUTIONARY STATEMENTS.

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When used in this Quarterly Report on Form 10-Q and in future filings by the
Company with the Securities and Exchange Commission, in our press releases,
letters and reports to stockholders and in oral statements made by our
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 our actual
results to differ materially from our historical experience and our 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 our financial performance and
could cause our actual results for future periods to differ from any opinions
or statements expressed with respect thereto. Such differences could be
material and adverse. We will not undertake and specifically decline 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.

WE ARE UNABLE TO PREDICT THE RESULTS OF OUR CURRENT REVIEW.

In October 2002, the Company announced that it is reviewing the accounting
treatment given to various transactions that occurred in 2000 and 2001 and
certain tax matters related to the Companys India based operations. The scope
of the review includes a $5.0 million data license agreement that was entered
into in the second quarter of 2000 and $6.2 million of data license sales that
occurred in the second quarter of 2001. The review also encompasses the
appropriateness of the accounting for certain transactions with the STAR
network which generated an aggregate of approximately $30 million in revenues
in 2001 and the first nine months of 2002 and certain tax matters related to
the Companys India operations. The possible impact of the tax issues under
consideration is not subject to reasonable estimation, although it does not
appear likely that the impact on the Companys tax liabilities could exceed $5
million under any scenario. The timing of the recognition of revenues
associated with approximately $1.3 million of software sales by the Companys
subsidiary in the United Kingdom in the first and second quarters of 2001 is
also being considered. Issues being considered as part of the review include
assessing whether revenues recognized in earlier periods should be
deferred and recognized over later periods, whether certain revenues should
be treated as a reduction in operating expenses and the timing of the
recognition of certain expenses. Pending completion of this
review, the Companys financial statements cannot be
completed because the Company is unable to reasonably estimate the effect of
any adjustments to the Companys prior financial results that may be necessary.
The Company is in the process of finalizing the conclusions reached by it as a
result of the review and will seek to complete its efforts as expeditiously as
possible, although the Company cannot provide definitive guidance as to when
the review process will be finally concluded.

On March 8, 2002, we received a letter from the Securities and Exchange
Commission (the SEC) stating that the SEC is conducting an inquiry of us and
requesting our voluntary assistance in connection with the provision of certain
documents relating to our 2001 financial results and certain transactions
between us and Access Cash International L.L.C., among other things. The letter
from the SEC states that the inquiry is non-public and that it should not be
construed as an indication that the SEC believes any violation of law has
occurred. In October 2002, the SEC staff requested additional information from
us related to certain of the matters that are the subject of our current
review. We have been cooperating fully with the SEC and we intend to continue
to do so. We may, however, be the subject of additional inquiries or become
subject to a fine or other liabilities.

The existence of the uncertainty associated with the Companys current review
and the ongoing SEC inquiry could have a depressing effect on the market price
of our common shares and could cause our customers and potential customers to
delay decisions to do business with us or to direct their business to our
competitors. Further, if we are unable to complete our review and prepare and
file our financial statements in the near future, Nasdaq could take action with
respect to the trading and continued listing of our shares. Any such action
could reduce the liquidity in the market for our shares and adversely affect
the ability of our stockholders to sell their shares.

WE ARE UNABLE TO PREDICT THE RESULTS OF THE INQUIRY BY THE SEC.

On March 8, 2002, we received a letter from the Securities and Exchange
Commission (the SEC) stating that the SEC is conducting an inquiry of us and
requesting our voluntary assistance in connection with the provision of certain
documents relating to our 2001 financial results and certain transactions
between us and Access Cash International L.L.C., among

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other things. The letter from the SEC states that the inquiry is non-public and
that it should not be construed as an indication that the SEC believes any
violation of law has occurred. In October 2002, the SEC staff requested
additional information from us related to certain of the matters that are the
subject of our current review. We have been cooperating fully with the SEC and
we intend to continue to do so. We may, however, be the subject of additional
inquiries or become subject to a fine or other liabilities.

ESTIMATES OF FUTURE FINANCIAL RESULTS ARE INHERENTLY UNRELIABLE.

From time to time, our representatives make public predictions or forecasts
regarding the Companys future results, including estimates regarding future
revenues, expense levels, tax rates, capital expenditures, earnings or earnings
from operations. Any forecast regarding our 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 our control. As a
result, there can be no assurance that our 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 our 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 us, and other information
relating to our Company and its products, when evaluating our prospective
results of operations.

The Company cannot currently provide
definitive guidance regarding its expected revenues
and earnings for 2002 as the results for this year could be impacted by any
restatement of prior period results that may be required as a result of the
Companys ongoing review of these prior periods. Excluding the
effect of any possible changes that could come out of the review, the
Company continues to believe, however, that its results for the year
ended December 31, 2002 and the quarter ended September 30,
2002 should be in line with the prior guidance contained in its
Quarterly Report on Form 10-Q for the quarter ended
June 30, 2002.

ADDITIONAL FACTORS.

Additional information regarding factors that could materially influence the
Companys future results of operations is contained in Part II, Item 5 of the
Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following exhibits are filed as part of this report:

|            |      |             |  |                                                                                                                                                                                      |  |                |   | 
|----------- | ---- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | - | 
|Exhibit No. |      | Description |  | Method of Filing                                                                                                                                                                    
|            |      |             |  |                                                                                                                                                                                     
|            | 2.2  |             |  | Asset Purchase Agreement, effective as of August 1, 2002, by and between Access Cash                                                                                                 |  | Filed herewith
|           
|           
|           
|           
|            |      |             |  | International L.L.C. (ACI) and
Cash Resources, Inc.                                                                                                                                |  |                |   | 
|           
|           
|           
|           
|            | 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
Securities and Exchange Commission (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)                                                                         |  |                |   | 
|           
|           
|           
|           
|            | 10.1 |             |  | Executive Employment Agreement, dated September 9, 2002, by and between eFunds                                                                                                       |  | Filed herewith
|           
|           
|           
|           
|            |      |             |  | Corporation and Paul F. Walsh                                                                                                                                                        |  |                |   | 
|           
|           
|           
|           
|            | 10.2 |             |  | Change in Control Agreement, dated as of September 16, 2002, by and between eFunds                                                                                                   |  | Filed herewith
|           
|           
|           
|           
|            |      |             |  | Corporation and Paul F. Walsh                                                                                                                                                        |  |                |   | 
|           
|           
|           
|           
|            | 10.3 |             |  | Consent and Resignation, dated September 13, 2002, of John A. Blanchard III                                                                                                          |  | Filed herewith

*Incorporated by reference



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None

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SIGNATURES

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

|                        |  |                                                                                                   
|----------------------- |  | --------------------------------------------------------------------------------------------------
|                        |  | eFunds Corporation
(Registrant)                                                                   
|                       
|                        |  |                                                                                                   
|                       
|Date: November 14, 2002 |  | /s/ Paul F. WalshPaul F. Walsh,
Chief Executive Officer and Chairman
(Principal Executive Officer)
|                       
|                        |  |                                                                                                   
|                       
|Date: November 14, 2002 |  | /s/ Thomas S. ListonThomas S. Liston
Interim Chief Financial Officer
(Principal Financial Officer)

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Index to Exhibits

|            |  |                                                                                      |  |                |  |  |  | 
|----------- |  | ------------------------------------------------------------------------------------ |  | -------------- |  |  |  | 
|Exhibit No. |  | Description                                                                          |  | Page Number   
|            |  |                                                                                      |  |               
|2.2         |  | Asset Purchase Agreement, effective as of August 1, 2002, by and between Access Cash |  | Filed herewith
|           
|           
|           
|           
|            |  | International L.L.C. ("ACI") and Cash Resources, Inc.                                |  |                |  | 
|           
|           
|           
|           
|10.1        |  | Executive Employment Agreement, dated September 9, 2002, by and between              |  | Filed herewith
|           
|           
|           
|           
|            |  | eFunds Corporation and Paul F. Walsh                                                 |  |                |  | 
|           
|           
|           
|           
|10.2        |  | Change in Control Agreement, dated as of September 16, 2002, by and                  |  | Filed herewith
|           
|           
|           
|           
|            |  | between eFunds Corporation and Paul F. Walsh                                         |  |                |  | 
|           
|           
|           
|           
|10.3        |  | Consent and Resignation, dated September 13, 2002, of John A. Blanchard III          |  | Filed herewith

7