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 quarterly period ended     Commission file number 0-13848
              March 31, 2000

                           ___________________________


                                CONCORD EFS, INC.

             (Exact name of registrant as specified in its charter)


                  Delaware                               04-2462252
       ______________________________              _____________________

      (State or other jurisdiction of                (IRS 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,  $0.33 1/3 par value,  as
of May 11, 2000 was 212,300,040.
<PAGE>

                       CONCORD EFS, INC. AND SUBSIDIARIES


                                      INDEX



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

Item 1. Financial Statements (Unaudited)

  Condensed Consolidated Statements of Income for Three Months
   ended March 31, 2000 and March 31, 1999                                1

  Condensed Consolidated Balance Sheets as of March 31, 2000
   and December 31, 1999                                                  2

  Condensed Consolidated Statements of Cash Flows
   Three Months ended March 31, 2000 and March 31, 1999                   4

  Notes to Condensed Consolidated Financial Statements                    5

Item 2. Management's Discussion and Analysis of Financial
  Condition and Results of Operations                                    10

Item 3. Quantitative and Qualitative Disclosures About
  Market Risk                                                            14

PART II - Other Information

Item 2:  Changes in Securities and Use of Proceeds                       15

Item 6. Exhibits and Reports on Form 8-K                                 15


Signatures                                                               16


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

                                                     Three Months Ended
                                                           March 31
                                                  -------------------------
                                                     2000            1999
                                                  ---------       ---------
                                           (in thousands, except per share data)

Revenue                                           $257,768        $178,046

Cost of operations                                 193,263         126,535

Selling, general and
 administrative expenses                            12,524          12,805

Acquisition and restructuring charges                  776          34,810
                                                  ---------       ---------
                    OPERATING INCOME                51,205           3,896

Other income (expense):
 Interest income                                     9,145           5,265
 Interest expense                                   (2,064)         (3,533)
                                                  ---------       ---------

          INCOME BEFORE INCOME TAXES                58,286           5,628

Income taxes                                        20,697           6,969
                                                  ---------       ---------
                   NET INCOME (LOSS)              $ 37,589        $ (1,341)
                                                  =========       =========

Pro forma provision for income taxes                   260             519
                                                  ---------       ---------
         PRO FORMA NET INCOME (LOSS)              $ 37,329        $ (1,860)
                                                  =========       =========
HISTORICAL AND PRO FORMA PER SHARE DATA:

 Basic earnings (loss)                            $   0.18        $  (0.01)
                                                  =========       =========

 Diluted earnings (loss)                          $   0.17        $  (0.01)
                                                  =========       =========

 Average basic shares outstanding                  212,165         198,246
                                                  =========       =========

 Average diluted shares outstanding                217,498         205,850
                                                  =========       =========

See notes to condensed consolidated financial statements.

                                       -1-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                                        March 31     December 31
                                                          2000           1999
                                                     -------------  ------------
                                                            (in thousands)
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                           $   96,976     $  121,001
  Securities available for sale                          487,263        456,209
  Accounts receivable, net                               180,504        192,263
  Inventories                                             17,398         18,076
  Prepaid expenses and other current assets               16,199         11,376
  Deferred income taxes                                    8,742          9,108
                                                     ------------   ------------
TOTAL CURRENT ASSETS                                     807,082        808,033

PROPERTY AND EQUIPMENT, net                              176,548        167,829

GOODWILL, net                                             55,959         54,046

OTHER INTANGIBLE ASSETS, net                              60,825         57,186

OTHER ASSETS                                              14,098         15,787
                                                     ------------   ------------
TOTAL ASSETS                                          $1,114,512     $1,102,881
                                                     ============   ============

See notes to condensed consolidated financial statements.






















                                       -2-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                                        March 31     December 31
                                                          2000           1999
                                                     -------------  ------------
                                                            (in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and other liabilities              $   91,137     $  129,217
  Deposits                                               101,947        100,475
  Accrued liabilities                                     50,671         50,435
  Income taxes payable                                    28,032         16,370
                                                     ------------   ------------
TOTAL CURRENT LIABILITIES                                271,787        296,497
                                                     ------------   ------------

LONG-TERM DEBT                                            75,000         75,000
DEFERRED INCOME TAXES                                     15,798         16,566
OTHER LIABILITIES                                          7,167          9,669
                                                     ------------   ------------
TOTAL LIABILITIES                                        369,752        397,732
                                                     ------------   ------------

COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS' EQUITY
  Common stock                                            70,744         70,703
  Other stockholders' equity                             674,016        634,446
                                                     ------------   ------------
TOTAL STOCKHOLDERS' EQUITY                               744,760        705,149
                                                     ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $1,114,512     $1,102,881
                                                     ============   ============

See notes to condensed consolidated financial statements.
















                                       -3-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                           Three Months Ended
                                                                March 31
                                                         -----------------------
                                                            2000         1999
                                                         ----------   ----------
                                                             (In thousands)

NET CASH PROVIDED BY OPERATING ACTIVITIES                 $ 46,173     $ 25,264

INVESTING ACTIVITIES:
 Acquisition of securities available for sale              (69,538)     (48,467)
 Sale of securities available for sale                      29,325       13,575
 Maturities of securities available for sale                 9,763        5,564
 Acquisition of property and equipment                     (17,896)     (11,654)
 Loan participations purchased                             (15,072)
 Merchants contracts purchased                              (6,661)      (4,896)
 Other, net                                                 (1,042)      (2,769)
                                                         ----------   ----------
NET CASH USED IN INVESTING ACTIVITIES                      (71,121)     (48,647)

FINANCING ACTIVITIES:
 Net increase in deposits                                    1,472       18,564
 Proceeds from sale of common stock                            420        3,350
 Proceeds from notes payable                                 6,000        7,000
 Payments under credit agreement, net                           -        (4,000)
 Payments on notes payable                                  (6,969)      (6,366)
                                                         ----------   ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                      923       18,548
                                                         ----------   ----------
DECREASE IN CASH AND CASH EQUIVALENTS                      (24,025)      (4,835)

Cash and cash equivalents
 at beginning of period                                    121,001       82,890
                                                         ----------   ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                $ 96,976     $ 78,055
                                                         ==========   ==========


See notes to condensed consolidated financial statements.









                                       -4-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                 MARCH 31, 2000


Note A - 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 month period ended March 31, 2000
are not necessarily  indicative of the results that may be expected for the year
ended  December 31, 2000.  For further  information,  refer to the  consolidated
financial statements and footnotes thereto included in the Concord EFS, Inc. and
Subsidiaries  (Company)  annual report on Form 10-K for the year ended  December
31, 1999.

Restatement of Historical Financial Information

The  historical  financial  information  presented  herein has been  restated in
accordance  with  pooling  of  interests   method  of  accounting  for  business
combinations.   The  financial  information  reflects  the  financial  position,
operating  results  and cash  flows of the  respective  companies  as though the
companies were combined for all periods presented.

Certain amounts have been reclassified from prior period consolidated  financial
statements to conform with the current year presentation.

Note B - Recent Acquisitions

On February 1, 2000,  the Company  acquired Card Payment  Systems  (CPS),  a New
York-based  reseller  of  payment  processing  services.   The  acquisition  was
accounted for as a pooling of interests  transaction in which Concord issued 6.2
million shares of its common stock. CPS provides  card-based  payment processing
services to independent  sales  organizations  (ISOs),  which in turn sell those
services to retailers.

CPS was an S-Corporation  for tax purposes prior to its merger with Concord.  As
such, the former owners of CPS were responsible for income taxes for the periods
prior to the merger rather than the Company.  The results of operations  include
pro  forma  income  taxes  that  would  have  been  required  if CPS had  been a
C-Corporation.







                                       -5-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                 MARCH 31, 2000


Note B - Recent Acquisitions - continued

The following table represents  selected  unaudited  financial  information,  in
thousands, split between the Company and CPS:

                                    Three months ended March 31
                                    ---------------------------
                                        2000           1999
                                    ------------   ------------
                                     (Unaudited)    (Unaudited)
Pro forma revenue
  Concord EFS, Inc.                   $253,721       $170,234
  CPS (1)                                4,047          7,812
                                     ----------     ----------
  Combined                            $257,768       $178,046
                                     ==========     ==========
Pro forma net income (loss)
  Concord EFS, Inc.                   $ 36,939       $ (2,868)
  CPS (1)                                  650          1,527
  Pro forma provision
    for CPS income taxes (2)               260            519
                                     ----------     ----------
  Combined                            $ 37,329       $ (1,860)
                                     ==========     ==========
Pro forma basic earnings
  per share combined                     $0.18         ($0.01)
                                     ==========     ==========
Pro forma diluted earnings
  per share combined                     $0.17         ($0.01)
                                     ==========     ==========

(1) The 2000  amounts  reflect the results of  operations  from  January 1, 2000
through January 31, 2000 (unaudited). The results of operations from February 1,
2000 to March 31, 2000 are included in Concord EFS, Inc. amounts.

(2) CPS terminated its S-Corporation election at the time of the merger with the
Company.

The Company  completed  the merger with  Electronic  Payment  Services  (EPS) on
February 26, 1999 by issuing 45.1 million  shares of the Company's  common stock
for all of the  outstanding  common stock of EPS. The  acquisition was accounted
for using the pooling of interests method of accounting.





                                       -6-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                 MARCH 31, 2000


Note B - Recent Acquisitions - continued

On February 7, 2000 the  Company  announced  completion  of its  acquisition  of
Virtual Cyber Systems  (VCS),  an internet  software  development  company.  The
acquisition  of VCS,  for which the Company paid  approximately  $1.7 million in
common stock,  was accounted for as a purchase  transaction and is immaterial to
the Company's financial statements.

Note C - Comprehensive Income (Loss)

Total comprehensive  income (loss) was $37,743 and ($2,220) for the three months
ended, March 31, 2000 and 1999, respectively.

Note D - Earnings Per Share

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

                                       Three Months Ended March 31
                                       ---------------------------
                                          2000             1999
                                       ----------       ----------
Numerator:
 Net income (loss)                      $ 37,589         $ (1,341)
                                       ==========       ==========
Denominator:
 Denominator for basic earnings per
 share, weighted-average shares          212,165          198,246

 Effect of dilutive securities,
 employee stock options                    5,333            7,604
                                       ----------       ----------
 Denominator for diluted earnings per
 share adjusted for weighted-average
 shares and assumed conversions          217,498          205,850
                                       ==========       ==========

Basic earnings (loss) per share            $0.18           ($0.01)
                                       ==========       ==========

Diluted earnings (loss) per share          $0.17           ($0.01)
                                       ==========       ==========




                                       -7-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                 MARCH 31, 2000


Note D - Earnings Per Share - continued

Excluding  acquisition costs and restructuring charges described in management's
discussion and analysis of financial condition and results of operations,  basic
earnings  per share for the three  month  periods  ended March 31, 2000 and 1999
were $0.18 and $0.13, respectively, and diluted earnings per share for the three
month periods ended March 31, 2000 and 1999 were $0.18 and $0.12, respectively.

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






































                                       -8-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                 MARCH 31, 2000

Note E - Segment Information

The operating segments for the three months ended March 31, 2000 are the same as
for the  prior  year.  However,  the  Company  changed  its  internal  reporting
mechanism to more closely  match  expenses  with the revenues  generated by each
subsidiary according to the segment allocations noted above.  Accordingly,  1999
segment  information  has  been  adjusted  to  reflect  the  current  method  of
management reporting for all periods presented. Industry segment information, in
thousands,  for the three  months  ended  March 31,  2000 and 1999 is  presented
below:
                              Merchant       ATM
                              Services     Services      Other         Total
                             ----------   ----------   ----------   -----------
Three months ended
 March 31, 2000
  Revenue                     $184,111     $ 70,979    $   2,678    $  257,768
  Cost of operations          (147,401)     (44,948)        (914)     (193,263)
  Selling, general, &
   administrative expenses                               (12,524)      (12,524)
  Acquisition &
   restructuring charges          (776)                                   (776)
  Taxes & interest, net                                  (13,616)      (13,616)
                             ----------   ----------   ----------   -----------
  Net income (loss)           $ 35,934     $ 26,031    $ (24,376)   $   37,589
                             ==========   ==========   ==========   ===========

  Assets by Segment          $ 546,423    $ 334,622    $ 233,467    $1,114,512
                             ==========   ==========   ==========   ===========
Three months ended
 March 31, 1999
  Revenue                     $120,138     $ 52,449    $   5,459    $  178,046
  Cost of operations           (91,583)     (31,713)      (3,239)     (126,535)
  Selling, general, &
   administrative expenses                               (12,805)      (12,805)
  Acquisition &
   restructuring charges                                 (34,810)      (34,810)
  Taxes & interest, net                                   (5,237)       (5,237)
                             ----------   ----------   ----------   -----------
  Net income (loss)           $ 28,555     $ 20,736    $ (50,632)   $   (1,341)
                             ==========   ==========   ==========   ===========

  Assets by Segment          $ 442,644    $ 283,277    $  95,178    $  821,099
                             ==========   ==========   ==========   ===========






                                       -9-
<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"  information,  within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Act of
1934, as amended.  Any such statements are not guarantees for future performance
and involve risks and  uncertainties,  and actual results may differ  materially
from those contemplated by such  forward-looking  statements.  Important factors
that  could  cause   actual   results  to  differ   materially   from  those  in
forward-looking statements include (i) the loss of key personnel or inability to
attract additional qualified personnel,  (ii) changes in card association rules,
(iii) changes in card  association  fees, (iv)  restrictions on surcharging or a
decline in the deployment of automated teller  machines,  (v) dependence on VISA
and MasterCard registrations,  (vi) the credit risk of merchant customers, (vii)
susceptibility  to fraud at the merchant  level,  (viii)  receiving  lower price
margins from higher  volume  merchants,  (ix)  increasing  competition,  (x) the
success of a new VISA debit card product, (xi) the loss of key customers,  (xii)
continued  consolidation  in the banking  and retail  industries,  (xiii)  risks
related  to  acquisitions,  (xiv)  changes  in rules and  regulations  governing
financial  institutions,  (xv)  the  inability  to  remain  current  with  rapid
technological  change,  (xvi)  dependence  on  third-party  vendors,  (xvii) the
imposition of additional state taxes, (xviii) volatility of the Company's common
stock price and (xix)  changes in interest  rates.  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 of Historical Financial Information

The  historical  financial  information  presented  herein has been  restated in
accordance  with  pooling  of  interests   method  of  accounting  for  business
combinations.   The  financial  information  reflects  the  financial  position,
operating  results  and cash  flows of the  respective  companies  as though the
companies were combined for all periods presented.

Overview

The Company is a fully  integrated  leading  provider of electronic  transaction
authorization,   processing,   settlement  and  funds  transfer  services  on  a
nationwide  basis.  The Company focuses on marketing its services to supermarket
chains and  multiple  lane  retailers,  financial  institutions,  petroleum  and
convenience  stores,  grocery stores, the trucking industry and other retailers.
The  Company's  primary  activity  is  Merchant  Services,  in which it provides
integrated  electronic  transaction  services  for credit  card,  debit card and
electronic benefits transfer (EBT) card transactions. These transaction services
include data capture,  authorization  and  settlement  services for over 400,000
point-of-sale  terminals.  The Company also provides  automated  teller  machine
(ATM) Services,  consisting of owning and operating the  MAC-branded  electronic
funds transfer network and processing for approximately  39,000 ATMs nationwide,
of which it owns approximately 1,000.

                                      -10-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued


Overview - continued

The  substantial  majority of the Company's  revenue (71.4% in 2000 and 67.5% in
1999) is generated from fee income related to Merchant Services.  These services
include:

--   the processing of credit card transactions for all major credit card brands
     including VISA, MasterCard, American Express, Discover and Diners Club;

--   the  processing  of  debit  card  transactions  occurring  at point of sale
     terminals at our merchants' businesses; and

--   the  provision of electronic  payment  services to  supermarket  chains and
     multiple lane retailers, financial institutions,  petroleum and convenience
     stores, grocery stores, trucking companies and other retailers.

Revenue from Merchant  Services  consists  primarily of discount fees charged to
merchants,  which are a  percentage  of the dollar  amount of each  credit  card
transaction  the  Company  processes,  and  may  also  include  a flat  fee  per
transaction.  The discount fee is  negotiated  with each  merchant and typically
constitutes  a  bundled  rate  for the  transaction  authorization,  processing,
settlement  and funds transfer  services we provide.  This revenue and fees from
other  transactions  are recognized at the time the merchants'  transactions are
processed.

ATM  Services  revenue  consists  of  processing  fees for third  party ATMs and
terminals,  and other access, switching and card processing fees, and fee income
and other  surcharges  charged for  proprietary  ATMs.  ATM Services  revenue is
recognized at the time of the transaction.

The remaining balance of the Company's revenue is derived principally from check
verification and authorization services and sales of point-of-sale terminals.

Cost of operations includes all costs directly  attributable to the provision of
services to the Company's customers.  The most significant  component of cost of
operations  includes  interchange and assessment fees, which are amounts charged
by the credit and debit card  associations.  Interchange and assessment fees are
billed  primarily as a percentage  of dollar volume  processed  and, to a lesser
extent,   as  a   per-transaction   fee.  Cost  of   operations   also  includes
telecommunications costs, occupancy costs,  depreciation,  the cost of equipment
leased  and  sold,  operating  salaries  and  wages,  amortization  of  merchant
contracts and other intangibles, the cost of operating the Company's MAC network
and other miscellaneous merchant supplies and services expenses.

The Company's selling,  general and administrative expenses include salaries and
wages and other general administrative  expenses (including certain amortization
costs).


                                      -11-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued


Results of Operations

Revenue  increased  44.8% to $257.8  million  in the first  quarter of 2000 from
$178.0 million in the first quarter of 1999. Of 2000 revenue, Merchant Services,
ATM  Services  and  Other  Services   accounted  for  71.4%,   27.6%  and  1.0%,
respectively of revenue.  Revenue from merchant card services,  increased 53.2%,
due primarily to increased  transactional  volumes.  Increased  volumes resulted
from adding new merchants, increasing acceptance of electronic payment cards and
the  cross-selling  of  settlement  processing  to  several  EPS  higher  volume
merchants. ATM Services revenue increased 35.3%. Increased transactional volumes
and  in-house  processing  of the EPS  off-line  debit  product were the primary
factors for the increase.  Other revenues decreased 50.9% due primarily to lower
terminal sales.

Net income as a percentage  of revenue was 14.6% in the first quarter of 2000 as
opposed  to a net  loss of  0.8%.  The  primary  factor  in the  change  was the
acquisition expenses and restructuring  charges incurred in the first quarter of
1999  in  connection  with  the  acquisition  of  EPS.  Further  impacting  this
comparison  was  related to certain  nondeductible  acquisition  costs and a tax
component write-off of $1.3 million for impaired state tax net operating losses.
These items were  incurred in the first  quarter of 1999 and was also related to
the  acquisition  of EPS.  Excluding  the  pre-tax  charges  and  tax  component
write-off, the tax rate decreased to 35.2% in the first quarter of 2000 compared
to 36.8% in the same period of the prior year.

Excluding  the pre-tax  charges  and tax  component  write-off,  net income as a
percentage of revenue improved to 14.9% in the first quarter of 2000 compared to
14.4% in the same  period of the prior  year.  The  margin  improvement  was the
result of a combination  of factors.  Improvements,  as a percentage of revenue,
were made in selling,  general and administrative  expenses, net interest income
and income taxes.  These  improvements were offset by an increase in the cost of
operations as a percentage of revenue.

Cost of  operations  increased in the first  quarter of 2000 to 75.0% of revenue
compared to 71.1% in the same period of the prior year.  The increase in cost of
operations,  as a  percentage  of revenue,  was  primarily  due to lower  margin
revenue which was principally  from larger,  higher volume merchants who command
and deserve lower transactional pricing. This lower margin revenue was primarily
from the  cross-selling  of settlement  processing to several  higher volume EPS
merchants and from bringing our off-line debit product  in-house.  The new lower
margin revenue was partially  offset by other  operating  costs such as payroll,
depreciation and amortization and other certain operating costs, decreasing as a
percentage of revenue.

Selling, general and administrative expenses decreased from $12.8 million in the
first  quarter of 1999 to $12.5 million in the first quarter of 2000, a decrease
of $0.3 million. These expenses were down slightly as higher  salaries and wages

                                      -12-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued


Results of Operations - continued

were offset by lower legal and other expenses. As a result, selling, general and
administrative expenses were 4.9% of revenue in the first quarter of 2000 versus
7.2% in the first quarter of 1999.

Acquisition expenses and restructuring  charges decreased to $0.8 million in the
first  quarter of 2000 compared to $34.8 million in the same period of the prior
year.  The current year expenses were primarily  advisory,  legal and accounting
fees  incurred in the  acquisition  of CPS. As of March 31, 2000,  approximately
$0.1 million of these  expenses  were accrued but unpaid.  The  acquisition  and
restructuring  charges  for the  first  quarter  of 1999  were a  result  of the
Company's  merger with EPS. As explained in detail in the annual report  section
of the  Company's  Form 10-K for the year ended  December 31, 1999,  the pre-tax
expenses and charges were for  acquisition  expenses,  communication  conversion
costs, asset write-offs, off-line debit conversion and severance and other.

The following table brings forward from December 31, 1999 the remaining  reserve
balance, in millions, from the EPS acquisition expenses and charges:

                               Balance at             Balance at
                     Cash or  December 31              March 31
    Description     Non-cash     1999      Activity      2000
------------------  --------  -----------  --------  -----------
Communication
  conversion costs    Cash       $11.3       $4.4        $6.9

Severance and
  other               Cash         1.4        0.9         0.5
                                 -----       ----        ----
                                 $12.7       $5.3        $7.4
                                 =====       ====        ====

Net interest  income  improved as a percentage  of total  revenue to 2.7% in the
first  quarter of 2000  compared to 1.0% in the same period of the prior year. A
principal  source of additional  interest  income each year is the investment of
available  cash flow from  operations  in securities  available  for sale.  Also
approximately  $61.7 million from the June 1999 offering of the Company's common
stock was  invested in  securities  available  for sale.  Increased  transaction
settlement volumes  contributed to interest earned from overnight and short-term
investments. These factors increased interest income by 74% in the first quarter
of 2000 over the same period of the prior year.  Total long and short-term  debt
was reduced  approximately  $146  million in June 1999 from the  proceeds of the
June 1999 common stock offering. As a result,  interest expense decreased 42% in
the  first  quarter  of 2000  over  the  same  period  of the  prior  year.  The
combination  of these factors  increased net interest  income as a percentage of
revenue.


                                      -13-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued


Liquidity and Capital Resources

In the three months ended March 31 2000,  the Company  generated  $46.2  million
from  operating  activities.  The Company also received $6.0 million in proceeds
from Federal  Home Loan Bank (FHLB)  advances and $0.4 million from stock issued
for  exercises  of options  under the  Company's  stock  option  plan.  Deposits
increased  $1.5  million.  From  cash  provided  from  operating  and  financing
activities,  $30.5  million  was  invested  in  securities,  net  of  sales  and
maturities,  $17.9 million was disbursed on capital additions,  and $6.7 million
was spent to purchase  merchant  contracts.  Long-term  debt was reduced by $7.0
million.  The capital  additions  were primarily for  communications  equipment,
point-of-sale terminals, new computer equipment and capitalized software.

The Company  believes that available  credit and cash generated from  operations
are adequate to meet the  Company's  capital  needs.  EFS National  Bank and EFS
Federal Savings Bank, wholly-owned  subsidiaries of the Company, exceed required
regulatory capital ratios.

Quantitative and Qualitative Disclosures About Market Risk

There have been no significant  changes to our disclosures on  quantitative  and
qualitative   disclosures  about  market  risk  since  December  31,  1999.  For
additional  information,  refer to Exhibit 13 - Annual Report to Stockholders in
our Form 10-K for the year ended December 31, 1999.

























                                      -14-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES

                                     PART II

                                OTHER INFORMATION

Item 2:  Changes in Securities and Use of Proceeds

On February 1, 2000, the Company issued  6,225,000 shares of its common stock in
connection with the Company's acquisition of all of the outstanding common stock
Card Payment  Systems,  Inc.(CPS).  In the  acquisition,  CPS merged as a wholly
owned  subsidiary  of the  Company,  and  the  shares  of  common  stock  of CPS
outstanding at the time of the merger were converted into shares of common stock
of the Company.

On February 7, 2000,  the Company  issued  84,889  shares of its common stock in
connection with the Company's  purchase of all of the  outstanding  common stock
Virtual Cyber Systems,  Inc.(VCS).  In the  acquisition,  VCS merged as a wholly
owned  subsidiary  of the  Company,  and  the  shares  of  common  stock  of VCS
outstanding at the time of the merger were converted into shares of common stock
of the Company.

The  6,225,000  shares issued to the 2  shareholders  of CPS who held all of the
outstanding  shares of CPS common stock at the time of the merger and the 84,889
shares issued to the shareholder of VCS who held all of the  outstanding  shares
of VCS common stock at the time of the merger were issued  without  registration
under the Securities Act of 1933 in reliance on the exemption under Section 4(2)
of that Act. The Company believes that each of these  shareholders was either an
accredited  investor or had such  knowledge  and  experience  in  financial  and
business  matters  as to be capable  of  evaluating  the merits and risks of the
investment in shares of the Company; was afforded access to material information
about the  Company,  understood  that the shares of the Company  acquired in the
merger were  "restricted  securities"  and agreed not to transfer  those  shares
except pursuant to an effective  registration statement under the Securities Act
of 1933 or an exemption from registration under that act.

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

(a)  Exhibits

     Exhibit 27 - Financial Data Schedule

(b)  Reports on Form 8-K

     none









                                      -15-

<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: May 12, 2000    By:  /s/ Dan M. Palmer
                               ---------------------------
                               Dan M. Palmer
                               Chairman of the Board and
                               Chief Executive Officer



Date: May 12, 2000    By:  /s/ Edward T. Haslam
                               ---------------------------
                               Edward T. Haslam
                               Chief Financial Officer




























                                      -16-