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


                                  FORM 10-Q 


   [X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934
        For the quarterly period ended September 30, 1996

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


                         Commission file Number 1-10993


                          SPS TRANSACTION SERVICES, INC.
             (Exact name of Registrant as specified in its charter)
              

              Delaware                                         36-3798295
       (State of Incorporation)                            (I.R.S. Employer
                                                          Identification No.)

    2500 Lake Cook Road, Riverwoods, IL                           60015
  (Address of principal executive offices)                     (Zip Code)

     Registrant's telephone number, including area code:   (847) 405-3400


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 [  ]

As of October 31, 1996, the Registrant had 27,200,128 shares of common stock, 
$0.01 par value per share, outstanding.


                                                            























<PAGE>

PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements


SPS TRANSACTION SERVICES, INC.

CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
                                                   September 30,   December 31,
                                                       1996           1995
                                                   ------------    ------------
                                                    (Unaudited) 
<S>                                                <C>             <C>
ASSETS:
  Cash and due from banks                            $   17,396     $    8,879
  Cash and due from banks - restricted                       --         29,000
  Investments held to maturity - at amortized cost       44,921         47,430
  Credit card loans                                   1,433,373      1,620,833
  Allowance for loan losses                             (65,648)       (63,704)
                                                     ----------     ----------
    Credit card loans, net                            1,367,725      1,557,129
  Accrued interest receivable                            20,904         23,828
  Accounts receivable                                    27,810         28,683
  Due from affiliated companies                           4,811          4,776
  Premises and equipment, net                            22,507         19,800
  Deferred income taxes                                  27,874         26,276
  Prepaid expenses and other assets                      28,248         31,806
                                                     ----------     ----------
TOTAL ASSETS                                         $1,562,196     $1,777,607
                                                     ==========     ==========
LIABILITIES:
  Deposits:
    Noninterest-bearing                              $    8,042     $   10,270
    Interest-bearing                                    457,042        372,073
                                                     ----------     ----------
  Total deposits                                        465,084        382,343
  Accounts payable, accrued expenses and other           53,306         44,788
  Income taxes payable                                    7,472         11,232
  Due to affiliated companies                           785,237      1,110,811
  Notes payable                                              --          2,095
  Accrued recourse obligation                            26,591         27,128
                                                     ----------     ----------
    Total liabilities                                 1,337,690      1,578,397
                                                     ----------     ----------
STOCKHOLDERS' EQUITY:
  Preferred stock, $1.00 par value, 100,000
    shares authorized; none issued or outstanding
  Common stock, $.01 par value, 40,000,000 and 
    40,000,000 shares authorized; 27,235,284 and    
    27,146,515 shares issued; 27,197,959 and 
    27,073,877 shares outstanding at September 
    30, 1996 and December 31, 1995, respectively            272            271
  Capital in excess of par value                         80,992         79,396
  Retained earnings                                     144,325        121,099
  Common stock held in treasury, at cost, $.01
    par value, 37,325 and 72,638 shares at September 
    30, 1996 and December 31, 1995, respectively         (1,032)        (1,957)
  Stock compensation plan                                   413            501
  Employee stock benefit trust                             (413)            --
  Unearned stock compensation                               (51)          (100)
                                                     ----------     ----------
    Total stockholders' equity                          224,506        199,210
                                                     ----------     ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $1,562,196     $1,777,607
                                                     ==========     ==========

See notes to unaudited consolidated financial statements.
</TABLE>









                                       -2-
<PAGE>
SPS TRANSACTION SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------------------------------------------
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>

                                    Three Months Ended       Nine Months Ended
                                       September 30,           September 30,
                                    ------------------     -------------------
                                     1996        1995        1996       1995 
                                    -------    -------     --------   --------
                                        (Unaudited)            (Unaudited)
<S>                                 <C>        <C>         <C>        <C>
Processing and service revenues     $65,712    $58,754     $204,808   $172,951
Merchant discount revenue            10,163      9,760       25,382     26,723
                                    -------    -------     --------   --------
                                     75,875     68,514      230,190    199,674

Interest revenue                     53,972     48,978      166,118    104,510
Interest expense                     18,238     17,809       59,824     43,176
                                    -------    -------     --------   --------
  Net interest income                35,734     31,169      106,294     61,334
Provision for loan losses            32,037     18,992       84,605     34,585
                                    -------    -------     --------   --------
  Net credit income                   3,697     12,177       21,689     26,749
                                    -------    -------     --------   --------

Net operating revenues               79,572     80,691      251,879    226,423

Salaries and employee benefits       23,736     22,213       72,407     64,710
Processing and service expenses      26,589     23,147       80,096     65,064
Other expenses                       20,221     16,638       61,915     44,804
                                    -------    -------     --------   --------
  Total operating expenses           70,546     61,998      214,418    174,578
                                    -------    -------     --------   --------

Income before income taxes            9,026     18,693       37,461     51,845
Income tax expense                    3,428      6,916       14,235     20,006
                                    -------    -------     --------   --------
Net income                          $ 5,598    $11,777     $ 23,226   $ 31,839
                                    =======    =======     ========   ========

Net income per common share         $  0.21    $  0.43     $   0.85   $   1.17
                                    =======    =======     ========   ========

Weighted average common shares 
  outstanding                        27,194     27,105       27,165     27,099


See notes to unaudited consolidated financial statements.
</TABLE>
















                                       -3-
<PAGE>
SPS TRANSACTION SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
                                                            Nine Months Ended
                                                              September 30,
                                                         ----------------------
                                                           1996          1995
                                                         --------     ---------
                                                              (Unaudited)
<S>                                                      <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                             $ 23,226     $ 31,839
  Adjustments to reconcile net income to
    net cash flows from operating activities:                                 
  Depreciation and amortization                            10,687        8,323
  Imputed interest on notes payable                            15        5,362
  Provision for loan losses                                84,605       34,585
  Deferred income taxes                                    (1,598)      (4,052)
  (Increase) decrease in operating assets:
  Cash and due from banks - restricted                     29,000      (30,237)
  Amounts due from affiliated companies                       (35)        (518)
  Accrued interest receivable and accounts receivable       3,797       (2,208)
  Prepaid expenses and other assets                         1,623       (6,070)
  Increase (decrease) in operating liabilities:
  Accounts payable, accrued expenses and other              8,520        5,425
  Income taxes payable                                     (3,239)       2,560
  Due to affiliated companies                               2,903        5,709
  Accrued recourse obligation                                (537)      (2,830)
                                                         --------     --------
    Net cash from operating activities                    158,967       47,888
                                                         --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investments held to maturity - purchases               (226,841)     (82,982)
  Investments held to maturity - maturities               229,350       58,029
  Net principal disbursed on credit card loans            (38,462)    (315,912) 
  Purchase of credit card portfolios                           --     (296,556)
  Proceeds from sale of credit card portfolio             138,861           --
  Purchases of premises and equipment, net                 (7,059)      (8,237)
                                                         --------     --------
    Net cash from investing activities                     95,849     (645,658)
                                                         --------     --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net decrease in noninterest-bearing deposits             (2,228)        (697)
  Net increase in interest-bearing deposits                84,969      147,619
  Due to affiliated companies                            (328,477)     658,740
  Repayment of notes payable                               (2,110)    (205,301)
  Proceeds from exercise of stock options                     622          581
  Change in treasury stock, net                               925       (1,642)
                                                         --------     --------
    Net cash from financing activities                   (246,299)     599,300
                                                         --------     --------

Increase in cash and due from banks                         8,517        1,530
Cash and due from banks, beginning of period                8,879        3,220
                                                         --------     --------
Cash and due from banks, end of period                   $ 17,396     $  4,750
                                                         ========     ========


SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND 
  FINANCING ACTIVITIES:
  Short-term note, net issued to purchase credit
  card portfolios                                        $     --     $ 48,333
                                                         ========     ========

See notes to unaudited consolidated financial statements.
</TABLE>









                                       -4-
<PAGE>
SPS TRANSACTION SERVICES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
-------------------------------------------------------------------------------

A.  ORGANIZATION AND BASIS OF PRESENTATION

  The consolidated financial statements include the accounts of SPS Transaction 
Services, Inc. (the "Company") and subsidiaries. The Company is a 73.5% 
majority owned subsidiary of NOVUS Credit Services Inc., which in turn is a 
wholly owned, direct subsidiary of Dean Witter, Discover & Co. ("DWD").  The 
Company provides a range of technology outsourcing services including the 
processing of credit card transactions, consumer private label credit card 
programs, commercial accounts receivable, and call center customer service 
activities in the United States.  SPS Payment Systems, Inc. ("SPS"), a wholly 
owned subsidiary of the Company, is incorporated in the State of Delaware.  
Hurley State Bank ("HSB"), a wholly owned subsidiary of the Company, is 
chartered as a bank by the State of South Dakota and is a member of the Federal 
Deposit Insurance Corporation.

  The Consolidated Balance Sheet as of September 30, 1996, the Consolidated 
Statements of Income for the three and nine months ended September 30, 1996 and 
1995, and the Consolidated Statements of Cash Flows for the nine months ended 
September 30, 1996 and 1995 are unaudited; however, in the opinion of 
management, all adjustments, consisting only of normal recurring accruals 
necessary for fair presentation, have been reflected.  All material 
intercompany balances and transactions have been eliminated.  The consolidated 
financial statements should be read in conjunction with the consolidated 
financial statements and notes thereto included in the Company's 1995 Annual 
Report to Stockholders and Annual Report on Form 10-K.  The results of 
operations for the interim periods should not be considered indicative of 
results to be expected for the full year.

B.  ACCOUNTING PRONOUNCEMENTS

  Effective January 1, 1996, the Company adopted Statement of Financial 
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of," which generally 
requires that long-lived assets be reported at the lower of their carrying cost 
or net realizable value.  The adoption of this statement was not material to 
the Company's consolidated financial position or results of operations.

  The Financial Accounting Standards Board has issued SFAS No. 123, "Accounting 
for Stock-Based Compensation," effective for fiscal years beginning after 
December 15, 1995. The Company has elected, as permitted by SFAS No. 123, to 
adopt the disclosure requirements of that standard but continue to account for 
stock-based compensation under APB Opinion No. 25, "Accounting for Stock Issued 
to Employees."



















                                       -5-
<PAGE>
  The Financial Accounting Standards Board has also issued SFAS No. 125, 
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments 
of Liabilities," effective for transfers of financial assets made after 
December 31, 1996. (The Financial Accounting Standards Board has recently 
proposed to delay the effective date of this statement for twelve months for 
transfers of certain financial assets.)  This statement provides financial 
reporting standards for the derecognition and recognition of financial assets, 
including the distinction between transfers of financial assets which should be 
recorded as sales and those which should be recorded as secured borrowings.  
SFAS 125 supersedes and incorporates the essential provisions of SFAS 122.  The 
Company believes that the effect of the adoption of SFAS 125 will not be 
material to its consolidated financial position or results of operations.

C.  RISKS AND UNCERTAINTIES 

   1.)  Allowance for Loan Losses: 

  The preparation of the consolidated financial statements in accordance with 
generally accepted accounting principles requires management to make estimates 
and assumptions that affect the reported amounts in the financial statements. 
Actual results could differ from these estimates.

  The allowance for loan losses on credit card loans is a significant estimate 
that is regularly evaluated by management for adequacy on a portfolio by 
portfolio basis. The evaluations take into consideration such factors as 
changes in the nature and volume of the loan portfolio, overall portfolio 
quality, review of specific problem loans and current economic conditions that 
may affect the borrower's ability to pay.

  The Company uses the results of these evaluations to provide an allowance for 
loan losses.  The exposure for credit losses for owned loans is influenced by 
the performance of the portfolio and other factors discussed above, with the 
Company absorbing all related losses. The exposure for credit losses for 
securitized loans is represented by the Company retaining a contingent risk 
based on the amount of credit enhancement provided.

  Management believes that its estimates have been historically prudent in 
light of the need to allow the market for asset securitizations, in particular 
those backed by credit card receivables, to mature, and in light of the 
uncertainty of accounting standards for asset securitizations. The Company has 
reassessed and revised its estimate of the allowance for losses required for 
loans intended to be securitized.  This reassessment was based on the Company's 
experience with credit losses related to securitized loans in a mature asset 
securitization market and the recent issuance of SFAS 125 which eliminated the 
uncertainty surrounding the appropriate accounting treatment for asset 
securitization transactions.  In the third quarter of 1996, this revision in 
estimate had no impact.  In the fourth quarter and future periods, the effect 
of this revision in estimate will likely be to reduce the provision for loan 
losses on credit card loans by an amount equal to the allowance that, absent 
such revision, would have been provided for loans intended to be securitized. 
However, due to the continuing rise in charge-offs, the Company does anticipate 
the need to increase its allowance for loan losses on owned loans in the fourth 
quarter, which will more than offset any benefit from the change in the 
estimated allowance on loans intended to be securitized.  Furthermore, the 
Company intends to maintain existing loss allowances for securitizations 
outstanding, reflected in the accrued recourse obligation, at the date of 
implementation, until the related loans are liquidated. 











                                       -6-
<PAGE>
  2.) Merchant Discount Revenue:

  The Company receives merchant discount revenue from its merchant clients 
resulting from cardholder purchases utilizing revolving or promotional payment 
plans.  The amount of merchant discount revenue the Company receives, however, 
is influenced by the mix and pricing of promotional payment plans offered to 
private label cardholders.  For certain merchant clients, where client 
marketing strategies promote longer term interest deferred programs, the 
Company charges a higher merchant discount rate, yet where client marketing 
strategies promote shorter term interest deferred programs, the Company charges 
a lower merchant discount rate.  The use of promotional payment plans, such as 
deferred interest plans, has grown in popularity with merchants and as a 
result, the use of these plans has begun to vary dramatically from past 
practices and expected practices.  Historically, the Company has recognized 
merchant discount revenue in the consolidated statements of income as received 
in the month when the sale occurred.  Beginning in the fourth quarter of 1996, 
a portion of merchant discount revenue received resulting from longer term 
promotional payment plans (six months or longer) will be deferred and amortized 
to interest income using the interest method over periods equal to the duration 
of the plans that originated the merchant discount revenue.  Management 
estimates that this change in accounting estimate will result in the net 
deferral of $6.0 million to $9.0 million of fourth quarter revenues into 1997.  
Going forward, Management believes this change will provide for a better 
matching of the revenues with the expenses and earning assets associated with 
such promotional payment plans.


D.  CASH AND DUE FROM BANKS - RESTRICTED

  Cash and due from banks - restricted as of December 31, 1995 represented cash 
and invested cash derived from collections of certain securitized receivables.  
Such collections, which include the investors' and a portion of the Company's 
share of cash collections, were deposited with a third party and were paid out 
in the month subsequent to collection. No such amounts existed at September 30, 
1996.


E.  ALLOWANCE FOR LOAN LOSSES AND ACCRUED RECOURSE OBLIGATION

  The changes in the allowance for loan losses were as follows:
<TABLE>
<CAPTION>
                                      Three Months Ended     Nine Months Ended
                                         September 30,         September 30,
                                      ------------------    ------------------
                                        (In Thousands)        (In Thousands)
                                        1996       1995       1996       1995
                                      -------    -------    -------    -------
<S>                                   <C>        <C>        <C>        <C> 
Balance, beginning of period          $65,304    $55,376    $63,704    $24,090
Additions:
  Provision for loan losses            32,037     18,992     84,605     34,585
  Purchase of credit card portfolios       --         --         --     29,843
                                      -------    -------    -------    -------
                                       32,037     18,992     84,605     64,428
Deductions:
  Charge-offs                         (36,434)   (20,027)   (99,415)   (41,302)
  Less: recoveries                      4,741      4,850     16,754     11,975
                                      -------    -------    -------    -------
  Net charge-offs                     (31,693)   (15,177)   (82,661)   (29,327)
                                      -------    -------    -------    -------
Balance, end of period                $65,648    $59,191    $65,648    $59,191
                                      =======    =======    =======    =======
</TABLE>

  At September 30, 1996, on an owned loan basis, there were $82.3 million or 
5.7% in loans past due 30 days through 89 days, and $59.4 million or 4.1% in 
loans past due 90 days through 179 days.  At September 30, 1995, on an owned 
loan basis, there were $61.3 million or 4.6% in loans past due 30 days through 
89 days, and $35.8 million or 2.7% in loans past due 90 days through 179 days.




                                       -7-
<PAGE>
  The changes in the accrued recourse obligation were as follows:
<TABLE>
<CAPTION>
                                   Three Months Ended        Nine Months Ended
                                      September 30,            September 30,
                                   ------------------       ------------------
                                     (In Thousands)           (In Thousands)
                                     1996       1995          1996       1995 
                                   -------    -------       -------    -------
<S>                                <C>        <C>           <C>        <C>
Balance, beginning of period       $26,623    $20,991        27,128     20,929

Additions:
  Provision charged to processing
    and service revenues            10,724      6,543        29,579     22,344

Deductions:
  Net charge-offs                  (10,756)    (9,435)      (30,116)   (25,174)
                                   -------    -------       -------    -------
Balance, end of period             $26,591    $18,099       $26,591    $18,099
                                   =======    =======       =======    =======
</TABLE>

F.  NOTES PAYABLE

  In February 1996, the Company made the final monthly installment on a note 
payable to Tandy.  This note related to the purchase, during the first quarter 
of 1995, of the Radio Shack and Tandy Name Brand credit card portfolios. The 
note had an imputed interest rate of 6.5%.


 Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS


RESULTS OF OPERATIONS  

  The Company's net operating revenues consist of processing and service 
revenues, merchant discount revenue and net credit income, which are derived as 
a result of its four principal business services: Network Services, Operational 
Outsourcing Services, Commercial Account Processing and Consumer Private Label 
Credit Card Programs.

  Processing and service revenues consist of four components (as described 
below): Transaction processing services, Managed Programs, HSB Programs and 
Servicing fees on securitized loans.

  Transaction processing services includes revenues received as a result of 
Network Services such as electronic transaction processing, the sale and 
servicing of point-of-sale terminals, a System Access Agreement with NOVUS 
Services, Inc., an affiliated company, and from Operational Outsourcing 
Services. Revenues from electronic transaction processing typically are based 
on the number of electronic point-of-sale transactions processed rather than 
the dollar transaction amount. Revenues from Operational Outsourcing Services 
typically are based upon the number of customer contacts processed through 
service activities such as customer billing inquiries, dispatch services, 
technical help-desk inquiries and catalog order processing.

  Managed Programs includes revenues received as a result of Commercial Account 
Processing and those Consumer Private Label Credit Card Programs which the 
Company administers, but for which it does not act as the card issuer or own 
the credit card loans. Managed Program revenues are derived from fees based on 
the volume of the services provided and on services provided in the 
administration of credit life insurance programs.





                                       -8-
<PAGE>
  HSB Programs refers to those Consumer Private Label Credit Card Programs for 
which HSB issues the credit card on behalf of the client and owns the credit 
card loans that are generated through the use of the card. The revenues derived 
from the administration of HSB Programs that are included as part of processing 
and service revenues primarily consist of late fees.

  Servicing fees on securitized loans are revenues derived from credit card 
loans that have been sold to investors through asset securitizations. Such 
revenues are the result of the fees earned for servicing the underlying credit 
card accounts. Loan securitizations have the effect of converting portions of 
net credit income, merchant discount revenue and credit card fees to a 
component of processing and service revenues for the credit card accounts that 
are securitized.

  Merchant discount revenue is derived from the Company's owned Consumer 
Private Label Credit Card Programs. Generally, credit card sales are subject to 
a discount charged to the merchant based upon contractually agreed upon 
percentages.  This percentage varies by portfolio and by the type of credit 
plan offered.  The recognition of merchant discount revenue on longer term 
promotional payment plans is further discussed in Note C to the consolidated 
financial statements on Page 7.

  Interest revenue represents finance charges derived from owned Consumer 
Private Label Credit Card Programs and investment interest. Net credit income 
is calculated by subtracting interest expense and the provision for loan losses 
from interest revenue.

  The following table presents, for the periods indicated, the percentage 
relationship that certain statement of income items bear to net operating 
revenues and the period-to-period percentage dollar increase or decrease in 
each item.
<TABLE>
<CAPTION>
                                    Three Months Ended      Nine Months Ended
                                       September 30,          September 30,
                                   --------------------   --------------------
                                    1996   1995  Change    1996   1995  Change
                                   ------ ------ ------   ------ ------ ------
<S>                                <C>    <C>    <C>      <C>    <C>    <C>
  NET OPERATING REVENUES:
  Processing and service revenues   82.6%  72.8%  11.8%    81.3%  76.4%  18.4%
  Merchant discount revenue         12.8   12.1    4.1     10.1   11.8   (5.0)
  Net credit income                  4.6   15.1  (69.6)     8.6   11.8  (18.9)
                                   -----  -----           -----  -----
                                   100.0  100.0   (1.4)   100.0  100.0   11.2
  OPERATING EXPENSES:
  Salaries and employee benefits    29.9   27.5    6.9     28.7   28.6   11.9
  Processing and service expenses   33.4   28.7   14.9     31.8   28.7   23.1
  Other expenses                    25.4   20.6   21.5     24.6   19.8   38.2
                                   -----  -----           -----  -----  
                                    88.7   76.8   13.8     85.1   77.1   22.8

  Income before income taxes        11.3   23.2  (51.7)    14.9   22.9  (27.7)
  Income tax expense                 4.3    8.6  (50.4)     5.7    8.8  (28.8)
                                   -----  -----           -----  -----  

  Net income                         7.0%  14.6% (52.5)%    9.2%  14.1% (27.1)%
                                   =====  =====           =====  =====  
</TABLE>
  Net income for the three months ended September 30, 1996 was $5.6 million, a 
decrease of $6.2 million, or 52.5%, over the same period a year ago.  Net 
income per common share for the three month period was $0.21, compared to $0.43 
in the prior year's third quarter.  Net income for the nine months ended 
September 30, 1996 was $23.2 million, a decrease of $8.6 million, or 27.1%, 
compared to the same period a year ago. Net income per common share for the 
nine month period was $0.85, compared to $1.17 for the same period in 1995.



                                       -9-
<PAGE>
The decline in earnings is primarily attributable to two factors: an increase 
in charge-offs in the Company's consumer private label credit card portfolios 
related to an industry-wide deterioration in consumer credit quality, and the 
mix and pricing of promotional payment plans offered to the Company's consumer 
private label credit cardholders.

  Net operating revenues for the third quarter of 1996 were $79.6 million, a 
decrease of 1.4% from the same period last year. Net operating revenues for the 
nine months ended September 30, 1996, were $251.9 million, an increase of 11.2% 
over the same period last year. The slight decrease in net operating revenues 
for the three months ended September 30, 1996 from the prior year quarter 
resulted primarily from increases in processing and service revenues, merchant 
discount revenue and net interest income, offset by increased net charge-offs, 
which resulted in an increase in provision for loan losses. The increase in net 
operating revenues for the nine months ended September 30, 1996 resulted 
primarily from increases in net interest income and processing and service 
revenues, partially offset by a decrease in merchant discount revenue and 
increased net charge-offs, which resulted in an increase in provision for loan 
losses expense. The increase in processing and service revenues and net 
interest income for both periods was primarily due to increased revenues 
resulting from the administration of consumer and commercial private label 
credit card programs and an increase in the volume of transaction 
processing services provided.  Increased revenues from operational outsourcing 
services further contributed to the increase in processing and service revenues 
for the nine months ended September 30, 1996.  The Company's active consumer 
private label accounts, both owned and managed, increased to 3.3 million at 
September 30, 1996, as compared with 3.2 million active consumer accounts at 
September 30, 1995.  Active commercial accounts grew 18.1% to 764,000 at 
September 30, 1996, as compared to 647,000 at September 30, 1995. For the three 
and nine months ended September 30, 1996, the number of point-of-sale 
transactions processed totaled 110.1 million and 312.1 million, respectively, 
up 15.5% and 15.3%, respectively, from the comparable prior periods.  For the 
three months ended September 30, 1996, the number of customer contacts 
processed totaled 2.0 million, which was comparable to the prior year period.  
For the nine months ended September 30, 1996, the number of customer contacts 
processed totaled 6.8 million, up 8.2% from the same period last year.

  Processing and service revenues increased 11.8% to $65.7 million for the 
three months ended September 30, 1996, as compared to $58.8 million for the 
same period last year.  For the nine months ended September 30, 1996, 
processing and service revenues increased 18.4% to $204.8 million as compared 
to $173.0 million for the same period last year.  Processing and service 
revenues represented 82.6% and 72.8% of net operating revenues for the three 
months ended September 30, 1996 and 1995, respectively.  For the nine months 
ended September 30, 1996 and 1995, processing and service revenues represented 
81.3% and 76.4% of net operating revenues, respectively.  Processing and 
service revenues consisted of the following:
<TABLE>
<CAPTION>
                                      Three Months Ended     Nine Months Ended
                                          September 30,        September 30,
                                      ------------------    -------------------
                                         (In Thousands)        (In Thousands)
                                        1996       1995        1996       1995 
                                      -------    -------    --------   --------
                                         (Unaudited)             (Unaudited)
<S>                                   <C>        <C>        <C>        <C>
  Transaction processing services     $20,698    $19,719     $62,787    $57,019
  Managed Programs                     21,074     17,121      66,312     55,987
  HSB Programs                         13,107      7,631      36,308     16,988
  Servicing fees on securitized loans  10,833     14,283      39,401     42,957
                                      -------    -------    --------   --------
                                      $65,712    $58,754    $204,808   $172,951
                                      =======    =======    ========   ========
</TABLE>




                                       -10-
<PAGE>
 The increase in revenues from transaction processing services for the three  
months ended September 30, 1996 resulted primarily from a higher volume of 
Network Services point-of-sale transactions processed and increased revenues 
from the sale of point-of-sale terminals.  The increase in revenues from 
transaction processing services for the nine months ended September 30, 1996, 
resulted from a higher volume of Network Services point-of-sale transactions 
processed, increased revenues from Operational Outsourcing Services and the 
sale of point-of-sale terminals.  The increase in revenues from Managed 
Programs for both the three and nine months ended September 30, 1996 resulted 
primarily from an increase in credit life insurance program revenues, and an 
increase in the volume of Commercial and Consumer Account Processing Services 
provided.  The increase in revenues from HSB Programs for both the three and 
nine months ended September 30, 1996 resulted from an increase in late fee 
revenue resulting from the growth in credit card loan portfolios, coupled with 
a higher level of credit card loan delinquencies.  The conversion of the Radio 
Shack and Tandy Name Brand credit card portfolios in March 1995 further 
contributed to the increase in HSB Program revenues for the nine months ended 
September 30, 1996.  The decrease in servicing fees on securitized loans for 
the three and nine months ended September 30, 1996 was due primarily to a 
higher rate of credit losses on securitized loans.

  Merchant discount revenue increased 4.1% to $10.2 million for the three 
months ended September 30, 1996, as compared to $9.8 million for the same 
period last year. For the nine months ended September 30, 1996, merchant 
discount revenue decreased 5.0% to $25.4 million in 1996 compared to the same 
period last year. For the nine month period there was a significant shift in 
promotional payment plans, for certain merchant clients, from longer term plans 
with higher discount rates to shorter term plans with lower discount rates. 
This resulted in the decrease in merchant discount revenue for the nine months 
ended September 30, 1996 as compared to the same prior year period. However, in 
the three months ended September 30, 1996, there has was a reversal from the 
previous two quarters in the use of promotional payment plans, for certain 
merchant clients, from shorter term plans with lower discount rates to longer 
term plans with higher discount rates.  Merchant discount revenue was 12.8% and 
12.1% of net operating revenues for the three months ended September 30, 1996 
and 1995, respectively, and was 10.1% and 11.8% of net operating revenues for 
the nine months ended September 30, 1996 and 1995, respectively.  Since the 
amount of merchant discount revenue recognized is influenced by the mix and 
pricing of promotional payment plans, the Company has reassessed its estimate 
for merchant discount revenues described in Note C to the consolidated 
financial statements on page 7.  Any change in this estimate may affect future 
recognition of merchant discount revenues.  For a discussion of important 
factors that might cause actual results to differ materially from those in this 
forward-looking statement, please refer to the discussion under the heading 
"CAUTIONARY STATEMENT" on page 16.

  Net credit income decreased 69.6% to $3.7 million for the three months ended 
September 30, 1996, as compared to the same period last year, resulting from a 
$13.0 million increase in provision for loan losses expense partially offset by 
a $4.6 million increase in net interest income.  For the nine months ended 
September 30, 1996, net credit income decreased 18.9% to $21.7 million from the 
same period last year, resulting from a $50.0 million increase in provision for 
loan losses expense partially offset by a $45.0 million increase in net 
interest income.  For both periods, the increase in interest revenue resulted 
from an increase in average credit card loans outstanding associated with 
growth in existing credit card portfolios and the addition of new credit card 
portfolios since September 30, 1995. The increase in interest expense for both 
periods was due to an increase in average borrowings to finance the growth in 
credit card loans, partially offset by lower interest rates on borrowings. The 
increase in the provision for loan losses is attributable to increased charge-
offs associated with a higher balance of credit card loans outstanding, coupled 
with an increase in the net charge-off rate. The increase in the Company's net 
charge-off rate was consistent with the industry-wide trend of increasing 
credit loss rates. The Company believes that the current industry-wide trend of 
increasing credit losses is related, in part, to increased consumer debt levels 
and bankruptcy rates. The Company believes this trend will continue and expects 
to experience a higher net charge-off rate for the remainder of 1996 and into 

                                       -11-
<PAGE>
the first half of 1997 as compared to 1995 and 1996. The Company is taking 
corrective measures to reduce future charge-offs by implementing a portfolio 
improvement program that analyzes credit risk and credit behavior scores for 
existing accounts, taking into consideration their current financial condition; 
re-scoring existing accounts and reducing credit lines or closing accounts as 
necessary; accelerating the development schedule for new credit scoring models; 
and increasing collection efforts by adding collectors, expanding call hours, 
and identifying high risk accounts to accelerate contacts.  To help mitigate 
the impact of these higher charge-offs, the Company has also instituted changes 
in cardholder terms and has instituted the implementation of certain client 
pricing revisions, including those for promotional programs.  In addition, the 
Company has reassessed its estimate of the allowance for losses related to 
securitized loans as described in Note C to the consolidated financial 
statements on page 6. A change in this estimate may affect future provisions 
for loan losses on credit card loans.  For a discussion of important factors 
that might cause actual results to differ materially from those in this 
forward-looking statement, please refer to the discussion under the heading 
"CAUTIONARY STATEMENT" on page 16.

  For the three months ended September 30, 1996, total operating expenses of 
$70.5 million represented an increase of 13.8% over the same period last year.  
Total operating expenses as a percentage of net operating revenues rose to 
88.7% for the three months ended September 30, 1996, as compared to 76.8% for 
the same period a year ago. For the nine months ended September 30, 1996, total 
operating expenses of $214.4 million represented an increase of 22.8% over the 
same period last year. Total operating expenses as a percentage of net 
operating revenues rose to 85.1% for the nine months ended September 30, 1996, 
as compared to 77.1% for the same period a year ago.

  For the three months ended September 30, 1996, salaries and employee benefits 
totaled $23.7 million, an increase of 6.9% from $22.2 million in the same 
period a year ago. For the nine months ended September 30, 1996, salaries and 
employee benefits totaled $72.4 million, an increase of 11.9% from $64.7 
million in the same period a year ago. The Company added approximately 383 
additional full-time equivalent employees since September 30, 1995.  
Approximately 86% of these new employees were assigned to field processing 
facilities to handle an increased volume of private label accounts processed by 
the Company and to address increased collection efforts. The remaining increase 
in personnel was primarily attributable to business acquisitions during 1995 
and an increase in Network Services personnel.

  Processing and service expenses include data processing, communications and 
account processing expenses, which are influenced, in part, by changes in 
transaction volume. For the three months ended September 30, 1996, such 
expenses rose to $26.6 million, or 14.9% on a period-to-period basis. For the 
nine months ended September 30, 1996, processing and service expenses increased 
to $80.1 million, or 23.1% from the same period a year ago. The increase in 
processing and service expenses for both periods resulted from a higher volume 
of transactions processed and private label services provided.  In addition, 
for the nine month period ended September 30, 1996, ongoing processing and 
service expenses associated with the integration of the Radio Shack and Tandy 
Name Brand credit card portfolios purchased in March 1995 affected 
comparability.  Processing and service expenses as a percentage of net 
operating revenues were 33.4% and 28.7% for the three months ended September 
30, 1996 and 1995, respectively. Processing and service expenses as a 
percentage of net operating revenues were 31.8% and 28.7% for the nine months 
ended September 30, 1996 and 1995, respectively.

  Other expenses include expenses relating to business development, merchant 
marketing, occupancy, advertising and promotion, cost of terminals sold, credit 
card fraud and other miscellaneous employee and administrative expenses.  For 
the three months ended September 30, 1996 and 1995, other expenses totaled 
$20.2 million and $16.6 million, respectively.  For the nine months ended 
September 30, 1996 and 1995, other expenses totaled $61.9 million and $44.8 
million, respectively. The increase in other expenses for both periods resulted 
from increased collection agency expenses, occupancy expenses, administrative 
expenses, fraud losses resulting from an increase in the incidence of 
fraudulent transactions and increased merchant marketing incentives expense.  
                                       -12-
<PAGE>
Other expenses were 25.4% and 20.6% of net operating revenues for the three 
months ended September 30, 1996 and 1995, respectively. Other expenses were 
24.6% and 19.8% of net operating revenues for the nine months ended September
30, 1996 and 1995, respectively.

  Owned credit card loans outstanding decreased $187.4 million from $1,620.8 
million at December 31, 1995 to $1,433.4 million at September 30, 1996. At 
September 30, 1996, the allowance for loan losses was $65.6 million, equal to 
4.6% of total owned credit card loans outstanding, compared with $63.7 million, 
or 3.9% of total owned credit card loans outstanding at December 31, 1995.  
Accruing loans that were contractually past due 90 days to 179 days represented 
4.1% of total owned credit card loans outstanding, at September 30, 1996, 
compared to 2.7% of total owned credit card loans outstanding at December 31, 
1995.


LIQUIDITY AND CAPITAL RESOURCES

  Through its liquidity policies, the Company seeks to ensure access to cost 
effective funding in all business environments.  This objective is accomplished 
through diversification of funding sources, extension of funding terms and 
staggering of liability maturities.

  The Company's capital policies seek to maintain a strong balance sheet 
consistent with the Company's business risks as well as regulatory 
requirements.  The Company's subsidiary bank, HSB, targets the maintenance of 
capital levels considered for regulatory purposes to be "well-capitalized" as 
defined by the FDIC Improvement Act of 1991.

  The Company finances its operations from three principal sources:  deposit 
taking activities utilizing certificates of deposit ("CDs")in denominations of 
$100,000 or more; securitizations of credit card loans; and borrowings from 
DWD.

  HSB administers a certificate of deposit program through which CDs are issued 
to investors in denominations of $100,000 or more.  Such CDs are issued to 
investors under two programs - an institutional CD program and a retail CD 
program.  CDs under the institutional CD program are issued directly by HSB to 
the investor and generally have a maturity of one to twelve months.  CDs under 
the retail CD program are issued to investors through Dean Witter Reynolds 
Inc., a subsidiary of DWD, and generally have a maturity of two to 10 years.  
As of September 30, 1996, CDs outstanding were $457.0 million, of which 
institutional CDs represented $231.7 million and retail CDs represented $225.3 
million.

  HSB maintains loan securitization programs with Receivables Capital 
Corporation ("RCC") and at September 30, 1996, outstanding loans under such 
programs were $280.0 million.  HSB also maintains a loan securitization program 
with Barton Capital Corporation ("BCC") and at September 30, 1996, outstanding 
loans under such program were $300.0 million. Securitized loans are sold with 
limited recourse to the Company.  The maximum recourse obligation on such 
securitized loans at September 30, 1996, was $120.0 million. At September 30, 
1996, $580.0 million or 28.8% of the HSB Program loans had been sold through 
loan securitizations.

  The RCC and BCC loan securitization programs are scheduled to expire in 
December 1996.  If these programs are not extended on or prior to their 
expiration dates, collections allocable to RCC and BCC following the  
expiration dates of the programs will be paid to RCC or to BCC, as applicable, 
and the interests of RCC and of BCC in the applicable securitization pool will 
gradually decline to zero.  Any receivables originated after the applicable 
program's expiration date would remain on the Company's consolidated balance 
sheet.





                                       -13-
<PAGE>
  The Company has an Amended and Restated Borrowing Agreement (the "Borrowing 
Agreement"), an Amended and Restated Bridge Agreement (the "Bridge Funding 
Agreement") and a facility fee letter agreement (the "Facility Fee Agreement"), 
(collectively, the "Financing Agreements") with DWD, pursuant to which DWD has 
agreed to provide loans to the Company. Under the Facility Fee Agreement, the 
Company has agreed to pay certain monthly facility fees in connection with its 
financing arrangements with DWD.  The Borrowing Agreement, which expires on 
April 17, 1997, was recently amended to increase the maximum amount available 
thereunder from $500.0 million to $1.0 billion (the "Commitment").  The Bridge 
Funding Agreement was also recently amended to extend its term until January 
31, 1997, and, in conjunction with the $500.0 million increase in the 
Commitment under the Borrowing Agreement, the Bridge Funding Agreement was 
amended to reduce the maximum amount available thereunder from $750.0 million 
to $250.0 million.  In addition, the maximum amount available under the Bridge 
Funding Agreement may be reduced by DWD up to the amount of any additional 
funds received by HSB pursuant to any new loan securitization agreement entered 
into after the date of the Bridge Funding Agreement.  At October 31, 1996, the 
Company had $760.8 million outstanding under the Borrowing Agreement and Bridge 
Funding Agreement.

  The Company expects to renew or replace the Financing Agreements prior to the 
expiration dates of such Agreements. The Company is continuing to evaluate 
alternative sources of financing to replace all or a portion of its financing 
arrangements with DWD. If the Company is unable to reach a satisfactory 
agreement with DWD for the renewal or the replacement of the Financing 
Agreements, the Company believes it will be able to meet its financial 
requirements over the next twelve months from other sources.

  Cash flows from operating activities resulted in net proceeds of cash of 
$159.0 million and $47.9 million for the nine months ended September 30, 1996 
and 1995, respectively.

  Investing activities for the nine months ended September 30, 1996 resulted in 
net proceeds of cash of $95.8 million, primarily consisting of net proceeds of 
cash from the sale of a private label credit card portfolio ($138.9 million), 
partially offset by net principal disbursed on credit card loans representing 
the difference between sales made using the cards and payments received from 
cardholders ($38.5 million). Investing activities for the nine months ended 
September 30, 1995 resulted in net uses of cash of $645.7 million, primarily 
consisting of the purchase of the Radio Shack and Tandy Name Brand credit card 
portfolios from Tandy Corporation on March 30, 1995 ($296.6 million), net 
principal disbursed on credit card loans ($315.9 million) and from investments 
in U.S. Treasury bills ($25.0 million). The purchase of the two Tandy credit 
card portfolios also included a short-term note, net of imputed interest of 
$48.3 million issued as part of the purchase consideration.

  Financing activities for the nine months ended September 30, 1996 resulted in 
net uses of cash of $246.3 million, primarily consisting of a net decrease in 
borrowings due to affiliated companies ($328.5 million) and from final payments 
made on short-term notes payable with Tandy Corporation ($2.1 million), 
partially offset by a net increase in interest-bearing deposits resulting from 
the issuance of CDs ($85.0 million).  Financing activities for the nine months 
ended September 30, 1995 resulted in net proceeds of cash of $599.3 million, 
primarily consisting of a net increase in borrowings due to affiliated 
companies ($658.7 million) and a net increase in interest-bearing deposits 
resulting from the issuance of CDs ($147.6 million), partially offset by 
payments made on short-term notes payable with Tandy Corporation ($205.3 
million). At September 30, 1996 and 1995, the Company had cash and cash 
equivalents of $17.4 million and $4.8 million, respectively. 








                                       -14-
<PAGE>
  The Company currently has no material commitments requiring capital 
expenditures.  The Company has not paid any dividends on its Common Stock and 
anticipates retaining future operating cash flows for the foreseeable future to 
finance growth and business expansion rather than to pay dividends to its 
stockholders. Any future determination as to the payment of dividends will 
depend upon results of operations, capital requirements, financial condition of 
the Company and such other factors as the Board of Directors of the Company in 
its discretion shall determine. Periodically, SPS and HSB have paid dividends 
to the Company. The amount of dividends that can be paid to the Company by HSB 
is restricted by applicable banking regulations.

INTEREST RATE RISK

  The Company's interest rate risk policies are designed to reduce the 
volatility of earnings resulting from changes in interest rates.  This is 
accomplished primarily through matched financing, where possible, which entails 
matching the repricing schedules of credit card loans and the related 
financing.  Matched financing includes the funding of variable rate credit card 
loans that are primarily indexed to the prime rate with floating rate financing 
that is primarily indexed to commercial paper rates and the federal funds rate. 
The Company generally retains basis risk between the prime rate and commercial 
paper/federal funds rates on variable rate credit card loans. Fixed rate credit 
card loans are generally funded with fixed rate financing (financing with an 
initial term of one year or greater).

  The Company also funds fixed rate credit card loans with floating rate 
financing by utilizing interest rate swaps, cost of funds agreements and 
interest rate caps to adjust the repricing characteristics of its financing to 
fixed rate financing.  Under interest rate swaps and cost of funds agreements, 
the Company effectively exchanges the interest payments on its financing with 
those of a counterparty. Interest rate cap agreements effectively establish a 
maximum interest rate on certain of the Company's floating rate borrowings. 
Interest rate swap agreements are entered into with an affiliate. Interest rate 
cap agreements are entered into with institutions that are established dealers 
in these instruments and that maintain certain minimum credit criteria 
established by the Company. Costs of funds agreements are entered into as part 
of agreements pursuant to which the Company owns the credit card loan portfolio 
and provides private label credit card processing services to certain of its 
credit card merchant clients.

  To reduce the volatility of interest expense from changes in interest rates, 
the Company had outstanding interest rate swaps and cost of funds agreements of 
$499.1 million and $515.7 million at September 30, 1996 and 1995, respectively.

  At September 30, 1996 and 1995, the Company had $40.0 million of interest 
rate cap agreements. At September 30, 1996, the current variable rates on all 
interest rate cap agreements exceeded the specified cap rates.

  At September 30, 1996 and 1995, the Company's interest rate swap agreements 
had maturities ranging from December 1996 to December 2000 and from November 
1995 to September 2000, respectively. At September 30, 1996 and 1995, the 
Company's interest rate cap agreements had maturities ranging from February 
1997 to September 1997.















                                       -15-
<PAGE>
CAUTIONARY STATEMENT

   Statements about the Company's future economic performance, strategic plans 
or objectives, revenue or earnings projections or other financial items and 
similar statements are not guarantees of future performance but are forward-
looking statements which by their nature are subject to numerous uncertainties 
that could cause actual results to differ materially from those in the forward-
looking statement.  Important factors that might cause actual results to differ 
materially include, but are not limited to, the following:   
   
   Changes in consumer payment patterns, bankruptcy trends and the seasoning of
   the Company's loan portfolio that affect the level and direction of credit
   card loan delinquencies and write-offs;

   Changes in management's estimate of the adequacy of loan loss allowances;

   Interest rate movements and their impact on consumer behavior and the
   Company's net interest spread and margin;

   The rate and magnitude of changes in the Company's credit card loan
   portfolio, including the overall mix of accounts, products and loan balances
   within the portfolio;

   The impact of account repricing and competitors' pricing initiatives on  
   consumers' usage of the Company's private label credit cards;

   The Company's ability to add new accounts and to activate both new and 
   existing accounts;

   The Company's ability to increase usage of its cards and to increase 
   transaction volume;

   The Company's ability to adapt successfully to technological changes to meet
   consumers' needs and developments in the marketplace;

   The Company's ability to access cost-effective funding (including through
   the securitization markets) and the continued legal and commercial  
   availability of interest rate contracts utilized by the Company to reduce 
   earnings volatility;

   The amount of credit card loans the Company determines to securitize and the 
   Company's ability to access the securitization markets;

   The Company's ability to minimize fraud losses in its credit card 
   business;

   Federal and State legislative and regulatory developments; 

   National and international economic conditions;

   Changes in consumer purchasing patterns utilizing promotional payment plans;

   Changes in client marketing strategies promoting shorter term and/or longer
   term promotional payment plans; and

   Changes in the merchant discount rates assessed on promotional payment 
   plans.




                                       -16-
<PAGE>
PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

The Company and its subsidiaries are defendants in various lawsuits and 
proceedings arising in the normal course of business.  Some of these lawsuits 
and proceedings arise in jurisdictions such as Alabama that permit punitive 
damages disproportionate to the actual damages alleged.  In light of the 
uncertainties inherent in any litigation, no assurances can be given as to the 
ultimate outcome of these lawsuits and proceedings.  However, the Company and 
its subsidiaries believe that there are meritorious defenses for all of these 
claims and are defending them vigorously.

Item 2.  Changes in Securities.- None.

Item 3.  Defaults Upon Senior Securities.- None.

Item 4.  Submission of Matters to a Vote of Security Holders. - None.

Item 5.  Other Information.- None.

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

(a) Exhibits.

    10.1  Third Amendment to Service Agreement dated as of January 1, 1996,  
          between SPS and MountainWest Financial Corporation.

    10.2  Amended and Restated Marketing Services Agreement dated as of January
          1, 1996, between SPS and NOVUS Credit Services Inc.

    10.3  Service Agreement dated as of September 1, 1996, between SPS and  
          NOVUS Services, Inc.

    10.4  First Amendment to the Amended and Restated Bridge Agreement dated as
          of September 1, 1996, between the Company and DWD.

    10.5  Second Amendment to the Amended and Restated Bridge Agreement dated 
          as of September 30, 1996, between the Company and DWD.

    10.6  Second Amendment to the Amended and Restated Borrowing Agreement 
          dated as of September 30, 1996, between the Company and DWD.

    27.0  Financial Data Schedule

(b) Reports on Form 8-K.

      A Current Report on Form 8-K, dated November 11, 1996, was filed with the
    Securities and Exchange Commission reporting Item 7 relating to the
    Company's 1996 Third Quarter Report to Stockholders.

      A Current Report on Form 8-K, dated October 15, 1996, was filed with the
    Securities and Exchange Commission reporting Item 7 relating to the
    Company's third quarter earnings release.

      A Current Report on Form 8-K, dated August 7, 1996, was filed with the
    Securities and Exchange Commission reporting Item 7 relating to the
    Company's 1996 Second Quarter Report to Stockholders.

      A Current Report on Form 8-K, dated July 16, 1996, was filed with the
    Securities and Exchange Commission reporting Item 7 relating to the
    Company's second quarter earnings release.






                                       -17-
<PAGE>
                                   SIGNATURE

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.




                                    SPS TRANSACTION SERVICES, INC.
                                    ------------------------------
                                            (Registrant)




Date: November 12, 1996             By:/s/ Russell J. Bonaguidi
     ------------------             -----------------------------------
                                    Russell J. Bonaguidi
                                    Vice President and Controller (Duly
                                    Authorized Officer and Principal
                                    Accounting Officer)














































                                       -18-
<PAGE>
    EDGAR
    Exhibit     Description of Exhibits
    -------     -----------------------
    10.1        Third Amendment to Service Agreement dated as of January 1,  
                1996, between SPS and MountainWest Financial Corporation.

    10.2        Amended and Restated Marketing Services Agreement dated as of 
                January 1, 1996, between SPS and NOVUS Credit Services Inc.

    10.3        Service Agreement dated as of September 1, 1996, between SPS  
                and NOVUS Services, Inc.

    10.4        First Amendment to the Amended and Restated Bridge Agreement 
                dated as of September 1, 1996, between the Company and DWD.

    10.5        Second Amendment to the Amended and Restated Bridge Agreement 
                dated as of September 30, 1996, between the Company and DWD.

    10.6        Second Amendment to the Amended and Restated Borrowing 
                Agreement dated as of September 20, 1996, between the Company 
                and DWD.

    27.0        Financial Data Schedule.