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, 1999

                           ___________________________


                                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 June 30, 1999 was 136,336,236.

<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES


                                      INDEX



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

Item 1.  Financial Statements (Unaudited)

  Condensed Consolidated Balance Sheets as of June 30, 1999
   and December 31, 1998                                                  1

  Condensed Consolidated Statements of Income Three
   Months and Six Months ended June 30, 1999 and June 30, 1998            3

  Condensed Consolidated Statements of Cash Flows
   Six Months ended June 30, 1999 and June 30, 1998                       4

  Notes to Condensed Consolidated Financial Statements                    5

Item 2.  Management's Discussion and Analysis of Financial
  Condition and Results of Operations                                    11

Item 3.  Quantitative and Qualitative Disclosures About
  Market Risk                                                            16

PART II - Other Information

Item 2.  Changes in Securities and Use of Proceeds                       17

Item 4.  Submission of Matters to a Vote of Stockholders                 17

Item 6.  Exhibits and Reports on Form 8-K                                18


Signatures                                                               19



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

                                             June 30    December 31
                                               1999         1998
                                           -----------  -----------
ASSETS                                                      (In thousands)
CURRENT ASSETS
    Cash and cash equivalents               $   162,019  $    82,029
    Securities available-for-sale               337,992      288,180
    Accounts receivable, net                    147,686      106,662
    Inventories                                  12,762       11,396
    Prepaid expenses and other                   10,585        7,863
    Deferred income taxes                         8,967        5,977
                                            -----------  -----------
                      TOTAL CURRENT ASSETS      680,011      502,107

OTHER ASSETS                                     19,373       23,615

PROPERTY AND EQUIPMENT                          324,447      302,937
    Less accumulated depreciation
     and amortization                          (167,077)    (148,447)
                                            -----------  -----------
                                                157,370      154,490

INTANGIBLE ASSETS                               152,958      146,712
    Less accumulated amortization               (50,878)     (42,806)
                                            -----------  -----------
                                                102,080      103,906
                                            -----------  -----------
                              TOTAL ASSETS  $   958,834  $   784,118
                                            ===========  ===========

See Notes to Condensed Consolidated Financial Statements - Unaudited.



















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

                                              June 30    December 31
                                                1999         1998
                                            -----------  -----------
LIABILITIES AND STOCKHOLDERS' EQUITY              (In thousands)
CURRENT LIABILITIES
    Accounts payable and                    $   157,399    $ 112,376
         other liabilities
    Accrued liabilities                          69,992       47,641
    Income taxes payable                         12,660       10,148
    Short-term borrowings                            -        21,000
    Current maturities of long-term debt             -        25,116
                                            -----------  -----------
                 TOTAL CURRENT LIABILITIES      240,051      216,281

LONG-TERM DEBT, LESS CURRENT MATURITY            80,000      173,000

DEFERRED INCOME TAXES                            12,222       21,336

OTHER LIABILITIES                                 9,806       12,966

STOCKHOLDERS' EQUITY
    Common Stock-par value $0.33 1/3
    per share; authorized 500.0 million
    shares, issued and outstanding 136.3
    million shares at June 30, 1999;
    issued and outstanding 127.9 million
    shares at December 31, 1998                  45,445       42,646
    Other stockholders' equity                  571,310      317,889
                                            -----------  -----------
                TOTAL STOCKHOLDERS' EQUITY      616,755      360,535
                                            -----------  -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $   958,834  $   784,118
                                            ===========  ===========

See Notes to Condensed Consolidated Financial Statements - Unaudited.














                                    -2-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                Three Months Ended          Six Months Ended
                                      June 30                   June 30
                              ---------------------       ---------------------
                                1999          1998          1999         1998
                              -------       -------       -------       -------
                                    (In thousands, except per share data)

Revenue                      $193,724      $155,258      $363,958      $289,924

Cost of operations            137,296       109,256       258,145       204,285

Selling, general and
 administrative expenses       12,564        12,581        24,932        25,681

Acquisition expenses and
 restructuring charges             -             -         34,810            -
                              -------       -------       -------       -------
            OPERATING INCOME   43,864        33,421        46,071        59,958

Other income (expense):
 Interest income                5,479         3,859        10,744         7,954
 Interest expense              (3,611)       (3,659)       (7,144)       (7,005)
                              -------       -------       -------       -------

         INCOME BEFORE TAXES   45,732        33,621        49,671        60,907

Income taxes                   16,466        12,290        23,273        22,227
                              -------       -------       -------       -------
                  NET INCOME  $29,266       $21,331       $26,398       $38,680
                              =======       =======       =======       =======

Per share data:
 Weighted average shares      129,076       127,639       128,545       127,562
                              =======       =======       =======       =======

 Basic earnings per share       $0.23         $0.17         $0.21         $0.30
                              =======       =======       =======       =======

 Adjusted weighted average
  shares and assumed
  conversions                 134,065       131,615       133,586       131,232
                              =======       =======       =======       =======

 Diluted earnings per share     $0.22         $0.16         $0.20         $0.29
                              =======       =======       =======       =======

See Notes to Condensed Consolidated Financial Statements - Unaudited.


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


                                                  Six Months Ended
                                                      June 30
                                               ---------------------
                                                 1999         1998
                                               --------     --------
NET CASH PROVIDED BY OPERATING                     (In thousands)
 ACTIVITIES                                    $ 91,358     $ 63,215

INVESTING ACTIVITIES:
 Acquisition of property and equipment          (25,021)     (37,750)
 Purchases of securities available-for-sale    (101,334)     (93,219)
 Purchase of securities held-to-maturity                      (9,630)
 Sale of securities available-for-sale           28,020       27,476
 Maturities of securities available-for-sale     11,784        4,844
 Maturities of securities held-to-maturity                    23,733
 Merchants contracts purchased                   (7,840)      (7,069)
 Other                                                          (811)
                                               --------     --------
NET CASH USED IN INVESTING ACTIVITIES           (94,391)     (92,426)

FINANCING ACTIVITIES:
 Proceeds from sale of common stock             222,139        1,675
 Proceeds from notes payable                      7,000       40,000
 Payments under credit agreement, net           (21,000)
 Payments on notes payable                     (125,116)     (12,932)
                                               --------     --------
NET CASH PROVIDED BY FINANCING ACTIVITIES        83,023       28,743
                                               --------     --------
INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                            79,990         (468)

Cash and cash equivalents at beginning
 of period                                       82,029       82,592
                                               --------     --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD     $162,019     $ 82,124
                                               ========     ========

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.






                                     -4-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1999

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 considered
necessary for a fair presentation have been included.  Operating results for the
six month  period  ended June 30,  1999 are not  necessarily  indicative  of the
results that may be expected for the year ended  December 31, 1999.  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, 1998.

The balance  sheet at December 31, 1998 has been  derived from the  consolidated
audited financial  statements  included in exhibit 99 of the Company's Form 10-K
for the year ended  December 31, 1998. The balance sheet does not include all of
the  information  and  footnotes  required  by  generally  accepted   accounting
principles for complete financial statements.

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

Restatement for Poolings

The historical  financial  information  presented in this Form 10-Q has been re-
stated to include the results of Electronic Payment Services,  Inc. ("EPS"). EPS
was  acquired in a  pooling-of-interests  transaction,  and in  accordance  with
pooling-of-interests  method of accounting, no adjustments have been made to the
historical  carrying  amounts of assets and  liabilities  of EPS.  However,  the
financial  information has been restated to include the operating results of EPS
for all stated periods prior to the combination.

On February 18, 1999, the stockholders approved the Company's issuance of shares
in connection with its acquisition of EPS. The Company completed the merger with
EPS on February 26, 1999 by exchanging 30,064,835 shares of the Company's common
stock for all of the outstanding  common stock of EPS. EPS provides  transaction
processing  services to financial  institutions  and  retailers  throughout  the
United  States.  EPS also  owns and  operates  electronic  data  processing  and
data-capture  networks  that  process  transactions   originating  at  ATMs  and
point-of-sale terminals.







                                      -5-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                  JUNE 30, 1999

Restatement for Pooling - continued

The following table presents selected financial information, in thousands, split
between the Company and EPS for the three and six month  periods  ended June 30,
1999 and 1998, respectively.

                             Three months ended             Six months ended
                                  June 30                       June 30
                          -----------------------       -----------------------
                            1999           1998           1999           1998
                          --------       --------       --------       --------
                          (Unaudited)  (Unaudited)     (Unaudited)   (Unaudited)
Revenue
  Concord EFS, Inc.       $193,724       $ 90,588       $317,853       $166,855
  EPS (1)                                  64,670         46,105        123,069
                          --------       --------       --------       --------
                          $193,724       $155,258       $363,958       $289,924
                          ========       ========       ========       ========

Net income
  Concord EFS, Inc.       $ 29,266       $ 15,014        $21,484       $ 27,174
  EPS (1)                                   6,317          4,914         11,506
                          --------       --------       --------       --------
                          $ 29,266       $ 21,331        $26,398       $ 38,680
                          ========       ========       ========       ========

(1) The 1999  amounts  reflect the results of  operations  from  January 1, 1999
through  February 28, 1999. The results of operations from March 1, 1999 to June
30, 1999 are included in Concord EFS, Inc. amounts.

Offering of Common Stock

During  the  quarter,  the  Company  filed a  registration  statement  with  the
Securities  and  Exchange  Commission  offering  2,000,000  shares of its common
stock, and the selling stockholders named in the registration  statement selling
29,659,125  shares of common  stock for a total of  31,659,125  shares of common
stock. As described in the registration statement, the selling stockholders were
the previous  owner banks of EPS who received  unregistered  common stock of the
Company in connection with the February 26, 1999  acquisition.  The underwriters
named in the  registration  statement had the option to purchase up to 4,748,000
additional  shares of common stock from the Company.  This option was  exercised
for a total of 36,407,125  shares of common stock sold in the  offering.  Net of
the  underwriting  discount and estimated  other  expenses of the offering,  the
Company received $207.8 million for the 6,748,000 shares of common stock issued.
The Company did not receive any proceeds  from the sale of shares by the selling
stockholders.


                                        -6-
<PAGE>
                     CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                  JUNE 30, 1999

Comprehensive Income

As of January 1, 1998, the Company adopted Financial  Accounting Standards Board
("FASB")  Statement  of  Financial   Accounting   Standards  ("SFAS")  No.  130,
"Reporting  Comprehensive  Income".  SFAS No. 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.  SFAS No. 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 SFAS No. 130.

Total  comprehensive  income was $23,188 and $21,338 for the three months ended,
June 30, 1999 and 1998, respectively.  Total comprehensive income, in thousands,
was  $19,441  and  $38,823  for the six months  ended,  June 30,  1999 and 1998,
respectively.

Earnings Per Share

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

                                     Three Months Ended      Six Months Ended
                                           June 30               June 30
                                      1999         1998       1999        1998
                                    -------      -------    -------     -------
Numerator:
 Net income                         $29,266      $21,331    $26,398     $38,680
                                    =======      =======    =======     =======
Denominator:
 Denominator for basic earnings
 per share, weighted-average
 shares                             129,076      127,639    128,545     127,562

 Effect of dilutive securities,
 employee stock options               4,989        3,976      5,041       3,670
                                    -------      -------    -------     -------
 Denominator for diluted earnings
 per share adjusted for weighted-
 average shares and assumed
 conversions                        134,065      131,615    133,586     131,232
                                    =======      =======    =======     =======

Basic earnings per share              $0.23        $0.17      $0.21       $0.30
                                    =======      =======    =======     =======

Diluted earnings per share            $0.22        $0.16      $0.20       $0.29
                                    =======      =======    =======     =======
                                        -7-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                  JUNE 30, 1999

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
and diluted earnings per share for the six month period ended June 30, 1999 were
$0.41 and $0.40, respectively.

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

Operations By Industry Segment

In June 1997,  the FASB issued SFAS No. 131,  "Disclosures  About Segments of an
Enterprise and Related  Information," which establishes  standards for reporting
financial  information about operating  segments in annual and interim financial
statements.  SFAS No. 131 requires that financial information be reported on the
same basis that is reported  internally for evaluating  segment  performance and
allocating  resources  to  segments.  SFAS No. 131  addresses  how  supplemental
financial information is disclosed in annual and interim reports; therefore, its
adoption in 1998 had no impact on the financial  condition or operating  results
of the Company.

Concord  has two  reportable  segments:  Merchant  Services  and  ATM  Services.
Merchant Services results from processing credit card transactions for all major
credit card brands including VISA,  MasterCard,  American Express,  Discover and
Diners  Club;   the  processing  of  debit  card   transactions   for  financial
institutions  issuing these and similar  cards;  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.

ATM Services include  transactional  fee income and surcharge  revenue from ATMs
owned by the Company as well as ATM transaction processing for ATMs owned by the
Company's merchants.

The Company  evaluates  performance  and allocates  resources based on profit or
loss  from   operations.   Items  classified  as  "Other"  include  revenue  not
identifiable  with the two  reportable  segments  described  above  and costs of
operations  and  selling,  general  and  administrative  expenses  which are not
allocated to the reportable segments.

No single  customer  of the  Company  accounts  for a  material  portion  of the
Company's revenues.

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



                                      -8-
<PAGE>
                     CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                  JUNE 30, 1999

Operations By Industry Segment - continued

Industry segment information,  in thousands, for the three and six month periods
ended June 30, 1999 and 1998 is presented below:

                              Merchant       ATM
                              Services     Services      Other         Total
                             ----------   ----------   ----------   ----------
Three months ended
 June 30, 1999
  Revenue                      $133,116     $ 56,704    $   3,904    $ 193,724

  Cost of operations            (85,470)     (31,717)     (20,109)    (137,296)

  Selling, general, &
   administrative expenses                                (12,564)     (12,564)

  Taxes & interest, net                                   (14,598)     (14,598)
                             ----------   ----------   ----------   ----------
  Net income (loss)            $ 47,646     $ 24,987    $ (43,367)   $  29,266
                             ==========   ==========   ==========   ==========
Three months ended
 June 30, 1998
  Revenue                      $103,291     $ 49,153    $   2,814    $ 155,258

  Cost of operations            (61,942)     (29,649)     (17,620)    (109,256)

  Selling, general, &
   administrative expenses                                (12,581)     (12,581)

  Taxes & interest, net                                   (12,090)     (12,090)
                             ----------   ----------   ----------   ----------
  Net income (loss)            $ 41,349     $ 19,459    $ (39,477)   $  21,331
                             ==========   ==========   ==========   ==========















                                      -9-
<PAGE>
                     CONCORD EFS, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
                                   (UNAUDITED)
                                  JUNE 30, 1999

Operations By Industry Segment - continued

                              Merchant       ATM
                              Services     Services      Other         Total
                             ----------   ----------   ----------   ----------
Six months ended
 June 30, 1999
  Revenue                      $245,441     $109,153    $   9,364    $ 363,958

  Cost of operations           (154,370)     (62,678)     (41,097)    (258,145)

  Acquisition costs and
   restructuring charges                                  (34,810)     (34,810)

  Selling, general, &
   administrative expenses                                (24,932)     (24,932)

  Taxes & interest, net                                   (19,673)     (19,673)
                             ----------   ----------   ----------   ----------
  Net income (loss)            $ 91,071     $ 46,475    $(111,148)   $  26,398
                             ==========   ==========   ==========   ==========
Six months ended
 June 30, 1998
  Revenue                      $190,292     $ 94,355    $   5,277    $ 289,924

  Cost of operations           (112,680)     (56,909)     (34,696)    (204,285)

  Selling, general, &
   administrative expenses                                (25,681)     (25,681)

  Taxes & interest, net                                   (21,278)     (21,278)
                             ----------   ----------   ----------   ----------
  Net income (loss)            $ 77,612     $ 37,446    $ (76,378)   $  38,680
                             ==========   ==========   ==========   ==========















                                     -10-
<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) the failure to fully integrate the
operations of Electronic  Payment  Services,  (iii) changes in card  association
rules, (iv) changes in card association fees, (v) restrictions on surcharging or
a decline in the deployment of automated  teller  machines,  (vi)  dependence on
VISA and MasterCard registrations,  (vii) the credit risk of merchant customers,
(viii)  susceptibility  to fraud at the merchant level,  (ix) the failure of the
Company,  its vendors or its  customers to  appropriately  manage Year 2000 code
problems, (x) increasing competition,  (xi) the success of a new VISA debit card
product, (xii) the loss of key customers,  (xiii) continued consolidation in the
banking and retail industries, (xiv) risks related to acquisitions, (xv) changes
in rules and regulations governing financial  institutions,  (xvi) the inability
to  remain  current  with  rapid  technological  change,  (xvii)  dependence  on
third-party  vendors,  (xviii) the imposition of additional  state taxes,  (xix)
volatility  of the  Company's  common  stock price and (xx)  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.

Recent Acquisitions

On February 26, 1999 the Company  completed  its  acquisition  of EPS, a company
which provides  transaction  processing  services to financial  institutions and
retailers  throughout the United States.  The acquisition was accounted for as a
pooling of interests in which the Company  exchanged  30.1 million of its shares
for all of the  outstanding  common  stock of EPS.  The Company  incurred  $34.8
million of expenses  related to the  acquisition  in the first  quarter of 1999.
These expenses included communication  conversion costs, advisory fees and asset
write-offs.  Management continues to review potential operational synergies from
the acquisition,  such as duplicate  facilities,  computer hardware and software
and other contractual relationships.

Restatement for Pooling

The  historical  financial  information  presented  in this  Form  10-Q has been
restated to include the results of EPS. In accordance with pooling-of- interests
method of accounting,  no adjustments have been made to the historical  carrying
amounts of assets and liabilities of EPS. However, the financial information has
been  restated to include the  operating  results of EPS for all stated  periods
prior to the combination.



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

Overview

Concord EFS, Inc.  (the  "Company") is a fully  integrated  leading  provider of
electronic transaction authorization,  processing, settlement and funds transfer
services on a nationwide  basis.  The Company focus 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
35,000 ATMs nationwide, of which it owns approximately 1,000.

The substantial  majority of the Company's  revenue (68.7% in the second quarter
of 1999 and 66.5% in the second  quarter of 1998) 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  for  financial  institutions
     issuing these and similar cards; 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  includes  primarily  discount  fees charged to
merchants,  which are a  percentage  of the dollar  amount of each  credit  card
transaction the Company  processes,  as well as 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.

The other principal component of the Company's revenue derives from ATM Services
(approximately  29.3% in the  second  quarter  of 1999 and  31.7% in the  second
quarter  of  1998).  ATM  Services  revenue  consists  of fee  income  and other
surcharges  charged for  proprietary  ATMs and  processing  fees for third party
ATMs.  The balance of the Company's  revenue is derived  principally  from check
verification and authorization  services,  sales of point-of-sale  terminals and
payroll processing services.

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

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

Overview - continued

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,  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, other general  administrative  expenses  (including certain  amortization
costs).

Results of Operations

Revenue  increased  24.7% to $193.7  million in the second  quarter of 1999 from
$155.3  million  in the  second  quarter  of  1998.  Of 1999  revenue,  merchant
services,  ATM services and other services  accounted for 68.7%, 29.3% and 2.0%,
respectively of revenue.  Revenue from merchant  services,  increased 28.9%, due
primarily to increased  transactional  volumes.  Increased volumes resulted from
the addition of new  merchants,  the widening  acceptance  of debit and EBT card
transactions  at new and existing  merchants and higher credit card  transaction
processing  fees. The increase in fees was a pass through to customers of higher
interchange  processing fees that were assessed by the credit card  associations
in April  1998 and  April  1999.  ATM  services  revenue  increased  15.4%;  the
placement  of  new  ATMs,  new  ATM   processing   customers  and  increases  in
transactional volumes accounted for the increase.  Other revenue increased 38.7%
due to increased terminal sales primarily to our new merchants.

Cost of operations  increased in the second  quarter of 1999 to 70.9% of revenue
compared to 70.4% in the prior year.  Credit card  association  interchange fees
and certain  other  transactional  related  costs were higher as a percentage of
revenue in the second quarter of 1999 than in the same period of 1998.  This was
largely offset by a decrease,  as a percentage of revenue,  in payroll  expenses
and other operating expenses.

Net income as a percentage of revenue was 15.1% and 13.7% in the second  quarter
of 1999  and  1998,  respectively.  The  increase  in cost  of  operations  as a
percentage  of revenue  described  above,  was offset by  selling,  general  and
administrative  expenses, net interest income and income taxes improvements as a
percentage  of  revenue.  Selling,  general  and  administrative  expenses  were
unchanged at $12.6  million in the second  quarter of 1999 and 1998 as increased
salaries  and wages  were  offset by lower  legal  costs.  Net  interest  income
improved from $0.2 million in the second  quarter of 1998 to $1.9 million in the
second  quarter  of 1999 as  available  cash from  operations  was  invested  in
securities  available  for  sale and debt was  repaid.  The  effective  tax rate
dropped from 36.6% in the second  quarter of 1998 to 36.0% in the second quarter
of 1999 which also improved net 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

Results of Operations - continued

For the six  months  ended  June 30,  1999,  revenue  increased  25.5% to $364.0
million from $289.9 million.  Of 1999 revenue,  merchant services,  ATM services
and other services accounted for 67.4%, 30.0% and 2.6%, respectively of revenue.
Revenue from merchant card services, increased 29.0%, due primarily to increased
transactional  volumes.  Increased  volumes  resulted  from the  addition of new
merchants, the widening acceptance of debit and EBT card transactions at new and
existing  merchants  and higher credit card  transaction  processing  fees.  The
increase  in  fees  was a  pass  through  to  customers  of  higher  interchange
processing fees that were assessed by the credit card associations in April 1998
and April 1999. ATM services revenue increased 15.7%; the placement of new ATMs,
new ATM processing  customers and increases in transactional  volumes  accounted
for the increase.  Other revenue increased 77.4% due to increased terminal sales
primarily to our new merchants.

Net income as a percentage of revenue was 7.3% and 13.3% in the six months ended
of 1999 and  1998,  respectively.  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. The total pretax charges were
$34.8 million. No additional  acquisition expenses or restructuring charges were
incurred in the second quarter of 1999. For a detailed explanation of the pretax
expenses and charges  please see the  Company's  Form 10-Q for the quarter ended
March 31, 1999.

The pretax  expenses  and charges  incurred in the first  quarter and  remaining
reserve balances, in millions, are summarized as follows:

                                       Acquisition
                                      Expenses and                Reserve
                             Cash or  Restructuring               Balance
     Description            Non-cash     Charges     Activity   at 6/30/99
     --------------------   --------  -------------  --------   ----------
     Acquisition expenses     cash        $10.5       $10.5        $  -

     Communication
      conversion costs        cash         12.4         0.2         12.2

     Asset write-offs       non-cash        8.2         8.2           -

     Off-line debit
      conversion              cash          2.8         0.7          2.1

     Severance and other      cash          0.9         0.7          0.2
                                          -----       -----        -----
                                          $34.8       $20.3        $14.5
                                          =====       =====        =====



                                      -14-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Results of Operations - continued

In addition to the pre-tax  charges,  a tax component  write off of $1.3 million
for impaired state tax net operating  losses of EPS was incurred.  Combined with
the non-tax  deductibility of certain  acquisition  costs, these items increased
income taxes as a percentage of revenue for the six months ended June 30, 1999.

Excluding the $34.8 million in  restructuring  charges and acquisition  expenses
described  above,  cost of operations  increased in the six months ended of 1999
from 70.9% of revenue  compared  to 70.5% in the same  period of the prior year.
Credit card association interchange fees and certain other transactional related
costs were higher as a  percentage  of revenue  during the six months ended June
30, 1999 than in the same period of 1998. This was largely offset by a decrease,
as a percentage of revenue,  in payroll expenses,  depreciation and amortization
and other operating expenses.

Excluding the restructuring  charges and acquisition  expenses,  net income as a
percentage of revenue  increased to 14.6% for the six months ended June 30, 1999
from 13.3% in the same  period of the prior year.  The  primary  factors for the
improvement were selling, general and administrative expenses declining to $24.9
million for the six months  ended June 30,  1999 from $25.7  million in the same
period of the prior  year  offset by the  increase  in cost of  operations  as a
percentage of revenue, described above.

Liquidity and Capital Resources

In the six months ended June 30 1999, the Company  generated  $91.4 million from
operating  activities.  The Company also  received $7.0 million in proceeds from
notes  payable,  $207.8 from an offering of stock,  and $14.3 million from stock
issued from  exercises of options under the Company's  stock option plans.  From
cash  provided  from  operating  and  financing  activities,  $61.5  million was
invested in securities, net of sales and maturities, $25.0 million was disbursed
on capital  additions,  $7.8 million was spent to purchase  merchant  contracts,
long-term debt was reduced by $125.1 million, and short-term borrowings of $21.0
million were paid off. 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.








                                      -15-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Impact of Year 2000

The Year  2000  preparedness  efforts  of the  Company  cover  both  information
technologies  ("IT") and non-IT  systems.  Non-IT systems  include those systems
used in the daily  operations of buildings and  facilities.  IT systems  include
computer hardware, software and related applications.

The Company has instituted a five-phase  plan with the goal of having its IT and
non-IT  systems  function  properly  with  respect to dates in the year 2000 and
beyond. These five phases are: awareness, assessment, renovation, validation and
implementation.  Based on progress to date,  the Company has  completed all five
phases for all systems.

There is no guarantee that the systems of other companies on which the Company's
systems rely will be converted in a timely manner.  However,  contingency  plans
have been created for all mission  critical  vendor  products and services.  The
contingency  plans have been further  enhanced and expanded to include  business
resumption  planning.  These plans include both the Company's  internal  mission
critical systems and third-party exposures,  based on the evaluation of progress
at that time.

Additional  testing of new or remediated  systems and applications will continue
as needed. Any new system must be tested and approved by the Year 2000 Committee
for necessity and Year 2000 impact before development and implementation begins.

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,  1998.  For
additional  information,   refer  to  Exhibit  99  -  Supplemental  Consolidated
Financial Statements in our Form 10-K for the year ended December 31, 1998.



















                                    -16-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES

                                    PART II

                                OTHER INFORMATION

Item 2:  Changes in Securities and Use of Proceeds

During  the  quarter,  the  Company  filed a  registration  statement  with  the
Securities  and  Exchange  Commission  offering  2,000,000  shares of its common
stock, and the selling stockholders named in the registration  statement selling
29,659,125  shares of common  stock for a total of  31,659,125  shares of common
stock. As described in the registration statement, the selling stockholders were
the previous  owner banks of EPS who received  unregistered  common stock of the
Company in connection with the February 26, 1999  acquisition.  The underwriters
named in the  registration  statement had the option to purchase up to 4,748,000
additional  shares of common stock from the Company.  This option was  exercised
for a total of 36,407,125  shares of common stock sold in the  offering.  Net of
the  underwriting  discount and estimated  other  expenses of the offering,  the
Company received $207.8 million for the 6,748,000 shares of common stock issued.
The Company did not receive any proceeds  from the sale of shares by the selling
stockholders.  From the $207.8 million proceeds,  $139.8 million was used to pay
off long-term debt of $118.8 million and short-term borrowings of $21.0 million.

Item 4: Submission of Matters to a Vote of Security Holders

The annual meeting of  stockholders  of the Company was held on May 20, 1999. At
that meeting, the stockholders voted on the following matters:

(1) A proposal to elect  directors to serve for the ensuing  year was  approved.
Officers  were  nominated and elected to serve as directors of the Company until
the next annual meeting and until their respective  successors have been elected
or until their earlier resignation,  death or removal. All nominees were elected
receiving more than 115,000,000 votes cast for their election.

(2) A proposal to approve a proposed  amendment to the Company's  Certificate of
Incorporation  to increase  the number of  authorized  shares of common stock to
500,000,000 was approved. There were a total of 108,102,949 votes were cast for,
7,386,181  votes were cast  against or  withheld,  and 369,106  abstentions  and
broker non-votes on this proposal.

(3) A proposal to approve a proposed  amendment to the Company's  1993 Incentive
Stock Option Plan to permit  optionees to transfer options to family members and
to increase  options granted  annually to  non-employee  directors was approved.
There were a total of 88,759,122 votes were cast for, 26,682,288 votes were cast
against or  withheld,  and  416,826  abstentions  and broker  non-votes  on this
proposal.








                                     -17-
<PAGE>
                                     PART II

                          OTHER INFORMATION - Continued

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

(a)  Exhibits

     none

(b)  Reports on Form 8-K

On May 6, 1999,  the Company filed a Report on Form 8-K to report,  under Item 5
of that form, the Company's filing of a registration  statement on Form S-3 with
the Securities and Exchange  Commission to register a total of 35,603,125 shares
of its common stock for sale to the public. Of the 35,603,125 shares, 28,963,125
were offered by the selling stockholders who acquired their shares in connection
with the  acquisition  by the Company of Electronic  Payment  Services,  Inc. on
February  26,  1999 and  2,000,000  shares  were  offered by the  Company.  Upon
completion of the registration  statement and subsequent offering, the number of
shares offered was  31,659,125.  Of the total shares  offered,  29,659,125  were
offered  by  the  selling  shareholders  named  in the  registration  statement,
2,000,000 shares were offered by the Company and an additional  4,748,000 shares
were allotted to underwriters.






























                                      -18-
<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 16, 1999   By:  /s/ Dan M. Palmer
                             ---------------------------
                             Dan M. Palmer
                             Chairman of the Board and
                             Chief Executive Officer



Date: August 16, 1999   By:  /s/ Thomas J. Dowling
                             ---------------------------
                             Thomas J. Dowling
                             Vice President and Chief
                             Financial Officer


























                                      -19-