SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q


                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934



          For the quarter ended     Commission file number 0-13848
              June 30, 1998

                           ___________________________


                                CONCORD EFS, INC.

             (Exact name of registrant as specified in its charter)


                  Delaware                               04-2462252
       ______________________________              _____________________        

      (State or other jurisdiction of                (I.R.S. Employer
       Incorporation of Organization)              Identification Number)


          2525 Horizon Lake Drive, Suite 120, Memphis, Tennessee 38133
                    (Address of Principal Executive Offices)
                                 (901) 371-8000
              (Registrant's telephone number, including area code)

                                _________________


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 of the registrant's Common Stock, $.33 1/3 par value, as of
June 30, 1998 was 97,656,826.
<PAGE>

                       CONCORD EFS, INC. AND SUBSIDIARIES


                                      INDEX



                                                                       Page No.
                                                                       --------
PART 1- Financial Information

Item 1.  Financial Statements (Unaudited)

  Condensed Consolidated Balance Sheets June 30, 1998
   and December 31, 1997                                                  1

  Condensed Consolidated Statements of Income Three and Six 
   Months ended June 30, 1998 and June 30, 1997                           2

  Condensed Consolidated Statements of Cash Flows
   Six Months ended June 30, 1998 and June 30, 1997                       3

  Notes to Condensed Consolidated Financial Statements                    4

Item 2.  Management's Discussion and Analysis of Financial
  Condition and Results of Operations                                     6


PART II - Other Information

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


Signatures                                                                9

























<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                             June 30   December 31
                                               1998       1997
                                            ---------   ---------
                                                       (Restated)
ASSETS                                          (In thousands)
CURRENT ASSETS
  Cash and cash equivalents                  $ 63,465    $ 63,795
  Securities available-for-sale               182,319     140,199       
  Accounts receivable, net                     65,570      54,166
  Inventories                                   8,022       5,259     
  Prepaid expenses and other                    7,483       5,765
                                             --------    --------
                    TOTAL CURRENT ASSETS      326,859     269,184

SECURITIES HELD-TO-MATURITY                    57,295      52,508

OTHER ASSETS                                   19,902      14,478      

PROPERTY AND EQUIPMENT                        103,716      89,520
  Less accumulated depreciation               
   and amortization                           (62,929)    (57,251)  
                                             --------    --------
                                               40,787      32,269
                                             --------    --------
                            TOTAL ASSETS     $444,843    $368,439
                                             ========    ========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and other
   liabilities                               $ 55,557    $ 51,701 
  Accrued liabilities                          12,455      10,453 
  Income taxes payable                                        990
  Current maturities of long-term debt            342         445
                                             --------    --------
               TOTAL CURRENT LIABILITIES       68,354      63,589

LONG-TERM DEBT, LESS CURRENT MATURITY          68,000      28,329

DEFERRED INCOME TAXES                           2,571       2,591

STOCKHOLDERS' EQUITY:
  Common Stock-par value $.33 1/3
   per share; authorized 200,000 shares,
   issued and outstanding 97,657
   shares at June 30, 1998; authorized
   100,000 shares, issued and outstanding
   66,404 shares at December 31, 1997          32,552      22,135
  Other stockholders' equity                  273,366     251,795
                                             --------    --------
               TOTAL STOCKHOLDERS' EQUITY     305,918     273,930
                                             --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY    $444,843    $368,439 
                                             ========    ========

See Notes to Condensed Consolidated Financial Statements - Unaudited.

                                       -1-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                 Three Months Ended         Six Months Ended
                                       June 30                   June 30
                                --------------------      --------------------
                                  1998        1997          1998         1997
                                -------      -------      --------     --------
                                           (Restated)    (Restated)   (Restated)
                                   (In thousands, except earnings per share)
 
Revenue                         $90,588      $63,628      $166,855     $118,412

Cost of operations               66,940       47,451       123,552       89,464

Selling, general and
  administrative expenses         3,701        3,799         8,386        7,507
                                -------      -------      --------     --------
              OPERATING INCOME   19,947       12,378        34,917       21,441

Other income (expense):
  Interest income                 3,671        2,557         7,766        4,863
  Interest expense                 (895)        (110)       (1,628)        (196)
                                -------      -------      --------     --------

    INCOME BEFORE INCOME TAXES   22,723       14,825        41,055       26,108

Income taxes                      7,709        5,570        13,881        9,970
                                -------      -------      --------     --------
                    NET INCOME  $15,014       $9,255       $27,174      $16,138
                                =======      =======      ========     ========

Per share data:
  Weighted average shares        97,575       96,090        97,498       95,874
                                 ======       ======        ======       ======
 
  Basic earnings per share        $0.15        $0.10         $0.28        $0.17
                                  =====        =====         =====        =====
  Adjusted weighted average
    shares and assumed
    conversions                 100,133       98,727        99,852       98,712
                                =======       ======        ======       ======
 
  Diluted earnings per share      $0.15        $0.09         $0.27        $0.16
                                  =====        =====         =====        =====

See Notes to Condensed Consolidated Financial Statements - Unaudited.













                                       -2-
<PAGE>

                       CONCORD EFS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                 Six Months Ended
                                                      June 30
                                               ---------------------
                                                 1998         1997
                                               --------     --------
                                                           (Restated)
                                                   (In thousands)
NET CASH PROVIDED BY OPERATING
 ACTIVITIES                                     $26,488      $24,817

INVESTING ACTIVITIES:
 Acquisition of property and equipment          (14,196)      (5,459)
 Purchases of securities available-for-sale     (93,219)     (58,643)
 Purchase of securities held-to-maturity         (9,630)      (8,915)
 Sale of securities available-for-sale           27,476       11,279
 Maturities of securities available-for-sale     23,733       15,949
 Maturities of securities held-to-maturity        4,844       10,884
 Merchants contracts purchased                   (7,069)      (5,276)
                                                -------     --------
NET CASH USED IN INVESTING ACTIVITIES           (68,061)     (40,181)

FINANCING ACTIVITIES:
 Proceeds from exercise of stock options          1,675        2,278
 Proceeds from notes payable                     40,000       18,000         
 Payments on notes payable                         (432)        (206)
                                                -------     --------
NET CASH PROVIDED BY FINANCING ACTIVITIES        41,243       20,072 
                                                -------     --------
(DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS    (330)       4,708

Cash and cash equivalents at beginning      
 of period                                       63,795       99,976
                                                -------     --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD      $63,465     $104,684
                                                =======     ========


For purposes of these statements, the Company considers all highly
liquid investments with a maturity of three months or less when
purchased to be cash equivalents.

See Notes to Condensed Consolidated Financial Statements - Unaudited.












                             -3-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1998

Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulations  S-X.  Accordingly,  they do not include all of the  information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating results for the three and six month periods ended June
30, 1998 are not necessarily  indicative of the results that may be expected for
the  year  ended  December  31,  1998.  For  further  information,  refer to the
consolidated   financial  statements  and  footnotes  thereto  included  in  the
Registrant's annual report on Form 10-K for the year ended December 31, 1997.

The  balance  sheet at  December  31,  1997 has been  derived  from the  audited
financial  statements  at that date but does not include all of the  information
and footnotes required by generally accepted accounting  principles for complete
financial statements.

Restatement for Pooling
The  historical  financial  information  presented  in this  Form  10-Q has been
restated  to  include  the  results of Digital  Merchant  Systems(DMS).  DMS was
acquired in a  pooling-of-interests  transaction  completed on June 30, 1998. In
accordance with  pooling-of-interests  method of accounting, no adjustments have
been made to the historical  carrying  amounts of assets and liabilities of DMS.
However,  the financial  information  has been restated to include the operating
results of DMS for all periods prior to the combination.

The results of operations reported by the separate  enterprises and the combined
amounts are summarized as follows: (in thousands)

                         Three months ended             Six months ended
                    ----------------------------  ----------------------------
                    June 30, 1998  June 30, 1997  June 30, 1998  June 30, 1997
                    -------------  -------------  -------------  -------------
                     (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
  Revenue
    Concord EFS         $82,534          $56,759       $149,386       $103,804
      DMS                 8,054            6,869         17,469         14,608
                        -------          -------       --------       --------
        Combined        $90,588          $63,628       $166,855       $118,412
                        =======          =======       ========       ========

  Net income (loss)
    Concord EFS         $14,221          $10,130       $ 25,260       $ 18,063
      DMS                   793             (875)         1,914         (1,925)
                        -------          -------       --------       --------
        Combined        $15,014          $ 9,255       $ 27,174       $ 16,138
                        =======          =======       ========       ========


Stock Split
The Board of  Directors  approved a  three-for-two  stock split on May 14, 1998.
Shareholders of record as of June 1, 1998 were distributed  additional shares on
June 8, 1998.

Securities
Below is a summary of the net unrealized gains on securities available-for-sale,
in thousands:

                                     June 30     December 31
                                      1998          1997
                                   ----------     ----------
Increase in securities
  available-for-sale                     $344           $161

Decrease in deferred taxes               (102)           (62)

Increase in equity                        242             99









                                  -4-
<PAGE>

                       CONCORD EFS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1998

Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except earnings per share):

                                        Three Months Ended    Six Months Ended
                                              June 30             June 30
                                          1998      1997       1998      1997
                                         -------  -------     -------  -------
Numerator:
 Net income                              $15,014  $ 9,255     $27,174  $16,138 
                                         =======  =======     =======  =======
Denominator:
 Denominator for basic earnings per
  share, weighted-average shares          97,575   96,090      97,498   95,874
 Effect of dilutive securities,
  employee stock options                   2,558    2,637       2,354    2,838
                                         -------   ------      ------   ------
 Denominator for diluted earnings per
  share adjusted for weighted-average 
  shares and assumed conversions         100,133   98,727      99,852   98,712
                                         =======   ======      ======   ======

Basic earnings per share                   $0.15    $0.10       $0.28    $0.17
                                           =====    =====       =====    =====

Diluted earnings per share                 $0.15    $0.09       $0.27    $0.16
                                           =====    =====       =====    =====

Earnings per share and related per share data have been  restated to reflect all
stock splits.

Comprehensive Income
As of January 1, 1998, the Company adopted Financial  Accounting Standards Board
(FASB)  Statement  130,   "Reporting   Comprehensive   Income".   Statement  130
establishes new rules for the reporting and display of comprehensive  income and
its  components;  however,  the adoption of this  Statement had no impact on the
Company's net income or stockholders' equity.  Statement 130 requires unrealized
gains or losses on the Company's  available-for-sale  securities, which prior to
adoption were  reported  separately  in  stockholders'  equity to be included in
other  comprehensive   income.   Prior  year  financial   statements  have  been
reclassified to conform to the requirements of Statement 130.

During  the second  quarter of 1998 and 1997,  total  comprehensive  income,  in
thousands,  amounted to $15,021 and $9,775, respectively.  During the six months
ended June 30, 1998 and 1997, total comprehensive income, in thousands, amounted
to $27,317 and $16,281, respectively.













                              -5-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Form 10-Q may contain or  incorporate  by  reference  statements  which may
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities  Act of 1933, as amended and Section 21E of the  Securities  Exchange
Act of 1934,  as amended.  Prospective  investors  are  cautioned  that any such
statements  are not  guarantees  for future  performance  and involve  risks and
uncertainties,  and  that  actual  results  may  differ  materially  from  those
contemplated by such  forward-looking  statements.  Important  factors currently
known to management  that could cause actual results to differ  materially  from
those in forward-looking statements include significant fluctuations in interest
rates,  inflation,  economic  recession,  significant changes in the federal and
state  legal  and  regulatory  environment,  and  competition  in the  Company's
markets.   The   Company   undertakes   no   obligation   to  update  or  revise
forward-looking  statements to reflect  changed  assumptions,  the occurrence of
unanticipated events or changes to future results over time.

Restatement for Pooling
The historical financial  information  presented in this Form 10-Q has been
restated  to  include  the  results of Digital  Merchant  Systems(DMS).  DMS was
acquired in a  pooling-of-interests  transaction  completed on June 30, 1998. In
accordance with  pooling-of-interests  method of accounting, no adjustments have
been made to the historical  carrying  amounts of assets and liabilities of DMS.
However,  the financial  information  has been restated to include the operating
results of DMS for all periods prior to the combination.

Acquisition
On June 30, 1998, the Company issued 4.425 million shares of its common stock in
exchange  for  all  the  outstanding  stock  of  Digital  Merchant  Systems  and
affiliated  entities (DMS), an independent sales organization in the credit card
processing  industry.  This  business  combination  has been  accounted for as a
pooling-of-interests  combination and, accordingly,  the consolidated  financial
statements  for periods prior to the  combination  have been restated to include
the accounts and results of operations of DMS.

Impact of Year 2000
The Company has completed an assessment and will have to modify  portions of its
software so that its computer  systems will  function  properly  with respect to
dates in the year 2000 and  thereafter.  The total Year 2000 project cost is not
expected to be material to the Company's financial position or operating results
and will be expensed as  incurred.  To date,  the Company has  expensed all cost
associated  with its Year  2000  assessment  and  related  modifications  of its
software.

The project is estimated to be completed not later than December 31, 1998, which
is prior  to any  anticipated  impact  on its  operating  systems.  The  Company
believes that with modifications to existing software,  the Year 2000 Issue will
not pose significant operational problems for its computer systems.  However, if
such  modifications  and conversions are not made, or are not completed  timely,
the Year 2000  Issue  could  have a  material  impact on the  operations  of the
Company. The Company  has  initiated  formal  communications  with  all  of  its
significant  suppliers,  networks and large customers to determine the extent to
which the Company's  interface  systems are  vulnerable to those third  parties'
failure to remediate their own Year 2000 issues.  There is no guarantee that the
systems of other  companies on which the  Company's  systems rely will be timely
converted and would not have an adverse effect on the Company's systems.

The cost of the  project  and the date on which  the  Company  believes  it will
complete the Year 2000  modifications  are based on management's best estimates,
which were derived utilizing  numerous  assumptions of future events,  including
the continued  availability  of certain  resources and other  factors.  However,
there can be no  guarantee  that these  estimates  will be  achieved  and actual
results could differ  materially from those  anticipated.  Specific factors that
might  cause such  material  differences  include,  but are not  limited to, the
availability  and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.



                                       -6-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Results of Operations
For the second quarter of 1998,  revenue increased 42% when compared to the same
quarter of the prior year.  Transaction  processing  revenue from Card  Services
(81% of total  revenue)  increased 46% as new merchants  were added and usage at
existing merchants increased.  Transaction processing for Trucking Services (15%
of total revenue)  increased 25%, driven by surcharge revenue at cash dispensing
machines  (ATMs),  ATM  transaction  fees,  ATM  processing  fees and additional
trucking companies using the Company's fuel and cash advance services. Check and
Terminal  Services  (4%  of  total  revenue)  increased  41% as  terminal  sales
increased  due to  merchant  additions  and  terminal  requirements  to  process
Electronic Benefits Transfer (EBT) transactions.

For the second quarter of 1998, net income as a percentage of revenue  increased
to 16.6% from 14.5% in the same  quarter of the prior year.  The primary  factor
for this  improvement was selling,  general and  administrative  costs decreased
$98,000 from  $3,799,000 to  $3,701,000  in the current year quarter.  Operating
cost  containment also contributed to the increase in net income as a percentage
of revenue.  Operating costs as a percentage of revenue improved to 73.9% in the
current  quarter  compared to 74.6% in the same quarter of the prior year.  This
improvement  was the net result of operational  payroll,  computer  maintenance,
depreciation and other  operational  costs growing less rapidly than transaction
processing revenue.

For the six months ended June 30, 1998,  revenue  increased 41% when compared to
the same  period of the prior year.  Transaction  processing  revenue  from Card
Services (81% of total  revenue)  increased 45% as new merchants  were added and
usage at existing  merchants  increased.  Transaction  processing  for  Trucking
Services (15% of total revenue)  increased 25%,  driven by surcharge  revenue at
cash dispensing  machines (ATMs),  ATM transaction fees, ATM processing fees and
additional  trucking  companies  using  the  Company's  fuel  and  cash  advance
services.  Check and Terminal  Services (4% of total  revenue)  increased 32% as
terminal sales increased due to merchant additions and terminal  requirements to
process Electronic Benefits Transfer (EBT) transactions.

For the six months  ended June 30, 1998,  net income as a percentage  of revenue
increased to 16.3% from 13.6% in the same period of the prior year.  The primary
factors were operating,  selling,  general and  administrative  expenses growing
less rapidly than transaction processing revenue.

Liquidity  and Capital  Resources
In the six months ended June 30, 1998, the Company generated $26.5 million
from  operating  activities,  received  $40.0  million  in  proceeds  from notes
payable,  and received $1.7 million from stock issued from  exercises of options
under the Company's Incentive Stock Option Plan. Investment securities purchases
were $46.8  million,  net of sales and  maturities,  $7.1  million  was spent to
purchase  merchant  contracts,  and  $14.2  million  was  disbursed  on  capital
additions. The capital additions were primarily new computer equipment

With little debt,  adequate  available  credit and strong cash  generation,  the
Company is in sound  financial  condition and expects to fund  continued  growth
from currently  available  resources.  EFS National Bank and EFS Federal Savings
Bank,  wholly-owned  subsidiaries  of the Company,  exceed  required  regulatory
capital ratios.






                                -7-
<PAGE>

                               PART II

                          OTHER INFORMATION



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

(a)  Exhibits

     None

(b)  Reports on Form 8-K

     There were no reports on Form 8-K filed during the second quarter.











































                                -8-
<PAGE>

                             Signatures



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


                                 CONCORD EFS, INC.



Date: August 12 1998   By:  /s/ Dan M. Palmer            
                             ---------------------------
                             Dan M. Palmer
                             Chairman of the Board and
                             Chief Executive Officer



Date: August 12, 1998   By:  /s/ Thomas J. Dowling   
                             ---------------------------
                             Thomas J. Dowling
                             Vice President & Controller
































                                 -9-
<PAGE>