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
           September 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
September 30, 1998 was 97,797,141.
<PAGE>

                       CONCORD EFS, INC. AND SUBSIDIARIES


                                      INDEX



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

Item 1.  Financial Statements (Unaudited)

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

  Condensed Consolidated Statements of Income Three and Nine 
   Months ended September 30, 1998 and September 30, 1997                 2

  Condensed Consolidated Statements of Cash Flows Nine
   Months ended September 30, 1998 and September 30, 1997                 3

  Notes to Condensed Consolidated Financial Statements                    4

Item 2.  Management's Discussion and Analysis of Financial
  Condition and Results of Operations                                     7


PART II - Other Information

Item 6.  Exhibits and Reports on Form 8-K                                10


Signatures                                                               11

























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

                                           September 30   December 31
                                               1998           1997
                                           ------------   -----------
                                                           (Restated)
ASSETS                                            (In thousands)
CURRENT ASSETS
  Cash and cash equivalents                    $ 68,164      $ 63,795
  Securities available-for-sale                 246,079       140,199       
  Accounts receivable, net                       77,632        54,166
  Inventories                                     7,554         5,259     
  Prepaid expenses and other                      6,227         5,765
                                               --------      --------
                    TOTAL CURRENT ASSETS        405,656       269,184

SECURITIES HELD-TO-MATURITY                                    52,508

OTHER ASSETS                                     23,358        14,478      

PROPERTY AND EQUIPMENT                          109,629        89,520
  Less accumulated depreciation               
   and amortization                             (65,950)      (57,251)  
                                               --------      --------
                                                 43,679        32,269
                                               --------      --------
                            TOTAL ASSETS       $472,693      $368,439
                                               ========      ========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and other
   liabilities                                 $ 61,062      $ 51,701 
  Accrued liabilities                             7,883        10,453 
  Income taxes payable                                            990
  Current maturities of long-term debt              230           445
                                               --------      --------
               TOTAL CURRENT LIABILITIES         69,175        63,589

LONG-TERM DEBT, LESS CURRENT MATURITY            73,000        28,329

DEFERRED INCOME TAXES                             3,877         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            32,599        22,135
  Other stockholders' equity                    294,042       251,795
                                               --------      --------
               TOTAL STOCKHOLDERS' EQUITY       326,641       273,930
                                               --------      --------
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY      $472,693      $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        Nine Months Ended
                                    September 30               September 30
                                --------------------      ---------------------
                                  1998        1997          1998         1997
                                -------      -------      --------     --------
                                           (Restated)                 (Restated)
                                   (In thousands, except earnings per share)
 
Revenue                         $99,715      $71,306      $266,570     $189,719

Cost of operations               73,490       52,360       197,042      141,825

Selling, general and
  administrative expenses         3,987        4,090        12,373       11,596 
                                -------      -------      --------     --------
              OPERATING INCOME   22,238       14,856        57,155       36,298

Other income (expense):
  Interest income                 4,442        3,299        12,209        8,162
  Interest expense               (1,063)        (299)       (2,692)        (496)
                                -------      -------      --------     --------

    INCOME BEFORE INCOME TAXES   25,617       17,856        66,672       43,964

Income taxes                      8,908        6,264        22,789       16,234
                                -------      -------      --------     --------
                    NET INCOME  $16,709      $11,592      $ 43,883     $ 27,730 
                                =======      =======      ========     ========

Per share data:
  Weighted average shares        97,695       96,662        97,563       96,137
                                 ======       ======        ======       ======
 
  Basic earnings per share        $0.17        $0.12         $0.45        $0.29
                                  =====        =====         =====        =====
  Adjusted weighted average
    shares and assumed
    conversions                 100,750       99,848       100,168       99,090 
                                =======       ======       =======       ======
 
  Diluted earnings per share      $0.17        $0.12         $0.44        $0.28
                                  =====        =====         =====        =====

See Notes to Condensed Consolidated Financial Statements - Unaudited.













                                       -2-
<PAGE>

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


                                                 Nine Months Ended
                                                    September 30
                                               ---------------------
                                                 1998         1997
                                               --------      -------
                                                           (Restated)
                                                   (In thousands)
NET CASH PROVIDED BY OPERATING
 ACTIVITIES                                     $39,445      $ 6,921

INVESTING ACTIVITIES:
 Acquisition of property and equipment          (20,109)      (9,739) 
 Purchases of securities available-for-sale    (146,705)     (98,444)
 Purchase of securities held-to-maturity         (9,630)     (13,138)
 Sale of securities available-for-sale           67,617       40,722
 Maturities of securities available-for-sale      4,844       18,513
 Maturities of securities held-to-maturity       33,681       14,713 
 Merchant contracts purchased                   (11,851)      (9,033)
                                                -------      -------
NET CASH USED IN INVESTING ACTIVITIES           (82,153)     (56,406)

FINANCING ACTIVITIES:
 Proceeds from exercise of stock options          2,621        5,377
 Proceeds from notes payable                     45,000       18,000   
 Payments on notes payable                         (544)        (311)
                                                -------      -------
NET CASH PROVIDED BY FINANCING ACTIVITIES        47,077       23,066
                                                -------      -------
(DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS   4,369      (26,419)

Cash and cash equivalents at beginning      
 of period                                       63,795       99,976
                                                -------      -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD      $68,164      $73,557
                                                =======      =======


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)
                               SEPTEMBER 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 nine month  periods  ended
September  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.

Recently Issued Accounting Pronouncements
In June 1997, the Financial  Accounting  Standards Board (FASB) issued Statement
No. 131,  "Disclosures about Segments of an Enterprise and Related Information,"
which is effective for annual and interim  periods  beginning after December 15,
1997. The Company will adopt the new requirements  retroactively in fiscal 1999.
This statement  established standards for the method that public entities use to
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments  in  interim  financial   reports  issued  to  stockholders.   It  also
establishes  standards  for related  disclosures  about  products and  services,
geographical areas and major customers.  Management has not completed its review
of the  statement,  but does not anticipate its adoption will have a significant
effect on the Company's annual or interim reporting.

The FASB issued in June 1998 its new  standard on  derivatives  - Statement  No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities".  The new
Statement resolves the  inconsistencies  that existed wiht respect to derivative
accounting,  and dramatically changes the way that many derivative  transactions
and hedged items are reported.  The  Statement is effective for years  beginning
after June 15, 1999, however, the Company adopted the statement early on July 1,
1998.  The Company has  determined  that the effect of Statement 133 will not be
material  to  the  earnings  and  financial  condition  of  the  Company.  Under
provisions  of the  Statement,  the  Company  has  reclassified  all  securities
held-to-maturity to securities available-for-sale on July 1, 1998.

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.



                                      -4-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                               SEPTEMBER 30, 1998

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

                         Three months ended             Nine months ended
                            September 30                   September 30
                    ----------------------------  ----------------------------
                         1998           1997           1998           1997
                    -------------  -------------  -------------  -------------
                     (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
  Revenue
    Concord EFS         $91,195          $64,716       $243,917       $168,521
    DMS                   8,520            6,590         22,653         21,198
                        -------          -------       --------       --------
        Combined        $99,715          $71,306       $266,570       $189,719
                        =======          =======       ========       ========

  Net income (loss)
    Concord EFS         $15,681          $11,422        $40,941       $ 29,485 
    DMS                   1,028              170          2,942         (1,755)
                        -------          -------       --------       --------
        Combined        $16,709          $11,592        $43,883       $ 27,730
                        =======          =======       ========       ========


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:

                                   September 30     December 31
                                       1998             1997
                                   ------------     -----------
Increase in securities
  available-for-sale                     $3,306            $161

Decrease in deferred taxes               (1,161)            (62)

Increase in equity                        2,145              99












                                      -5-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                               SEPTEMBER 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    Nine Months Ended
                                           September 30         September 30
                                          1998      1997       1998      1997
                                         -------  -------     -------  -------
Numerator:
 Net income                              $16,709  $11,592     $43,883  $27,730 
                                         =======  =======     =======  =======
Denominator:
 Denominator for basic earnings per
  share, weighted-average shares          97,695   96,662      97,563   96,137 
 Effect of dilutive securities,
  employee stock options                   3,055    3,186       2,605    2,953
                                         -------   ------     -------   ------
 Denominator for diluted earnings per
  share adjusted for weighted-average 
  shares and assumed conversions         100,750   99,848     100,168   99,090 
                                         =======   ======     =======   ======

Basic earnings per share                   $0.17    $0.12       $0.45    $0.29
                                           =====    =====       =====    =====

Diluted earnings per share                 $0.17    $0.12       $0.44    $0.28
                                           =====    =====       =====    =====

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 third  quarter  of 1998 and 1997,  total  comprehensive  income,  in
thousands, amounted to $18,612 and $11,911, respectively. During the nine months
ended September 30, 1998 and 1997,  total  comprehensive  income,  in thousands,
amounted to $45,929 and $28,191, respectively.









                                       -6-
<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,  successful  implementation  of  the
Company's  Year  2000  compliance  project,  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 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. Additionally,
the  Company  filed a  registration  statment  under  Form S-3  during the third
quarter.  The filing  registered the shares issued in the DMS pooling,  allowing
the resale of the shares. The registration was declared effective  September 17,
1998.

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 Company  established  a Year 2000  committee in November 1997 in response to
the Year 2000  concerns.  Mission  critical  systems  have been  identified  and
reviewed  by the  Company  and are  currently  being  tested.  Internal  mission
critical  system  testing is estimated to be completed by December 31, 1998. The
Company's  processing systems also require testing for Year 2000 compliance with
external  entities such as credit and debit  networks and  telephone  companies.
External testing is estimated to be completed by March 31, 1999. The entire Year
2000 project is estimated to be completed not later than June 30, 1999, which is
prior to any anticipated impact on its operating systems.


                                       -7-
<PAGE>
                       CONCORD EFS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Impact of Year 2000 - continued
The Year 2000 committee is also  developing a contigency  plan to respond to the
worst  case  scenarios  of the the  Year  2000  issue.  The  Company  anticpates
completion of the contigency plan by March 31, 1999.

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.

Results of Operations
For the third quarter of 1998,  revenue  increased 40% when compared to the same
quarter of the prior year.  Transaction  processing  revenue from Card  Services
(84% of total  revenue)  increased 49% as new merchants  were added and usage at
existing merchants increased.  Transaction processing for Trucking Services (13%
of total revenue)  increased 15%, 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 (3% of total  revenue)  decreased 24% due primarily to higher
terminal sales experienced in the third quarter of 1997.

For the third quarter of 1998,  net income as a percentage of revenue  increased
to 16.8% from 16.3% in the same  quarter of the prior year.  The primary  factor
for this  improvement was selling,  general and  administrative  costs decreased
$103,000 from $4,090,000 to $3,987,000 in the current year quarter.

For the nine  months  ended  September  30,  1998,  revenue  increased  41% when
compared to the same period of the prior year.  Transaction  processing  revenue
from Card Services (83% of total  revenue)  increased 47% as new merchants  were
added and usage at existing  merchants  increased.  Transaction  processing  for
Trucking  Services (14% of total  revenue)  increased  21%,  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 (3% of total revenue) increased 6%.

For the nine months  ended  September  30, 1998,  net income as a percentage  of
revenue  increased to 16.5% from 14.6% 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.

                                      -8-
<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 nine months ended September 30, 1998, the Company generated $39.4 million
from  operating  activities,  received  $45.0  million  in  proceeds  from notes
payable,  and received $2.6 million from stock issued from  exercises of options
under the Company's Incentive Stock Option Plan. Investment securities purchases
were $50.2  million,  net of sales and  maturities,  $11.9  million was spent to
purchase  merchant  contracts,  and  $20.1  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.










































                                       -9-
<PAGE>

                                     PART II

                                OTHER INFORMATION

Item 3:  Quantitative  and Qualitative  Disclosures  About Market Risk. 

     The Company has determined that there has been no significant changes since
     December  31, 1997.  For futher  discussion,  refer to "Interest  Rate Risk
     Management" on page 7 of the Company's 1997 Annual Report.

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

(a)  Exhibits

     Exhibit 21 - Subsidiaries of the Registrant:

                                       Jurisdiction of
            Company                      Organization          Ownership
-------------------------------  ----------------------------  ---------
Concord Computing Corporation    Delaware                         100%
EFS National Bank                National Bank Charter            100%
Concord Equipment Sales          Tennessee                        100%
EFS Federal Savings Bank         Federal Savings Bank Charter     100%
Pay Systems of America, Inc.     Tennessee                        100%
American Bankcard, Inc.          Illinios                         100%
Digital Merchants Systems, Inc.  Illinios                         100%

(b)  Reports on Form 8-K

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






























                                      -10-
<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: November 16, 1998  By: /s/ Dan M. Palmer            
                             ---------------------------
                             Dan M. Palmer
                             Chairman of the Board and
                             Chief Executive Officer



Date: November 16, 1998  By:  /s/ Thomas J. Dowling   
                             ---------------------------
                             Thomas J. Dowling
                             Vice President & Controller


































                                      -11-
<PAGE>