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

    
                                  FORM 10-K/A
                                AMENDMENT NO. 1       


                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

[X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the fiscal year ended December 31, 1998

                                      OR

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

                        Commission File Number 1-14342
                        ------------------------------
                               NOVA CORPORATION
            (Exact name of registrant as specified in its charter)

                GEORGIA                                58-2209575
        (State or Other Jurisdiction                  (IRS Employer
     of Incorporation of Organization)             Identification No.)

                    ONE CONCOURSE PARKWAY, SUITE 300, 30328
                          ATLANTA, GEORGIA (Zip Code)
                   (Address of Principal Executive Offices)

                                (770) 396-1456
              Registrant's telephone number, including area code
              --------------------------------------------------

     Securities registered pursuant to Section 12(b) of the Act:

        Title of each class                    Name of each exchange on which 
Common Stock, $0.01 par value per share     registered New York Stock Exchange

       Securities registered pursuant to Section 12(g) of the Act: None
       ----------------------------------------------------------------

  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

  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

  As of March 29, 1999, the aggregate market value of the common stock of NOVA
held by non-affiliates of the Registrant was approximately $1,516,636,817 based
upon the closing price of $25.750 per share on the New York Stock Exchange on
such date. Non-affiliate ownership is calculated by excluding all shares that
may be deemed to be beneficially owned by executive officers, directors and
other control persons, without conceding that all such persons are "affiliates"
for purposes of the federal securities laws. As of March 29, 1999, there were
72,819,789 shares of the Registrant's common stock outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

  Certain information contained in the Registrant's Proxy Statement for the 1999
Annual Meeting of Shareholders to be held on May 26, 1999, is incorporated
herein by reference in Part III of this Annual Report on Form 10-K.  Pursuant to
General Instruction G(3) of Form 10-K, the Registrant will file the definitive
Proxy Statement with the Securities and Exchange Commission no later than April
30, 1999.
<PAGE>
 
                               NOVA CORPORATION
                          ANNUAL REPORT ON FORM 10-K
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
                                        

                               TABLE OF CONTENTS
                               -----------------
    
<TABLE>
<CAPTION>
ITEM                                                                                                 PAGE
NUMBER                                                                                               NUMBER
------                                                                                               ------
<S>                                                                                                 <C>    
                                                  PART I                                                   
                                                                                                           
1.    Business...................................................................................    1 - 22
                                                                                                           
2.    Properties.................................................................................        23
                                                                                                           
3.    Legal Proceedings..........................................................................        23
                                                                                                           
4.    Submission of Matters to a Vote of Security Holders........................................        23
                                                                                                           
4A    Executive Officers of the Company..........................................................   23 - 24
                                                                                                           
                                                 PART II                                                   
                                                                                                           
5.    Market for Registrant's Common Equity and Related Stockholder Matters......................        25
                                                                                                           
6.    Selected Financial Data....................................................................        25
                                                                                                           
7.    Management's Discussion and Analysis of Financial Condition and Results of Operations......   26 - 35
                                                                                                           
7A.   Quantitative and Qualitative Disclosures About Market Risk.................................        35
                                                                                                           
8.    Financial Statements and Supplementary Data................................................        35
                                                                                                           
9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.......        35
                                                                                                           
                                                 PART III                                                  
                                                                                                           
10.   Directors and Executive Officers of the Registrant.........................................        36
                                                                                                           
11.   Executive Compensation.....................................................................        36
                                                                                                           
12.   Security Ownership of Certain Beneficial Owners and Management.............................        36
                                                                                                           
13.   Certain Relationships and Related Transactions.............................................        36
                                                                                                           
                                                 PART IV                                                   
                                                                                                           
14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K...........................        36
                                                                                                           
SIGNATURES.......................................................................................        41
APPENDIX A.......................................................................................        42 
</TABLE>
     
<PAGE>
 
Forward-looking Statements
  In addition to historical information, this Annual Report on Form 10-K
contains "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 (the "Securities Act"), as amended, and Section 21E of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). When
used in this report, the words "may," "could," "should," "would," "believe,"
"anticipate," "estimate," "expect," "intend," "plan" and similar expressions or
statements regarding future periods are intended to identify forward-looking
statements. All forward-looking statements are inherently uncertain as they are
based on various expectations and assumptions concerning future events, which by
their nature involve substantial risks and uncertainties beyond NOVA
Corporation's control. Forward-looking statements may also be made in NOVA's
other reports filed under the Exchange Act, press releases, and other documents;
as well as by NOVA management in oral statements. NOVA undertakes no obligation
to update or revise any forward-looking statements for events or circumstances
after the date on which such statement is made. New factors emerge from time to
time, and it is not possible for NOVA to predict all of such factors. Further,
NOVA cannot assess the impact of each such factor on its business or the extent
to which any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking statements.

NOVA's forward-looking statements are based upon numerous assumptions, including
assumptions relating to:

 .  Continued growth in the level in transaction volume;
 .  The impact of acquisitions (including without limitation the acquisition of
   PMT Services, Inc.), portfolio purchases, joint ventures and other alliances;
 .  Consolidation activity in the banking and transaction processing industries;
 .  Pricing strategies and market concentration considerations;
 .  Strategies relating to new technologies and product development;
 .  Changes in credit card association rules, laws, regulations, or other
   industry standards;
 .  General economic conditions and industry trends; and
 .  The impact of NOVA's Year 2000 compliance efforts as well as those of NOVA's
   vendors, supplies and customers

Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's opinion as of the date of this report.
NOVA refers readers to the information set forth under the caption "Item 1.
Business--Certain Risks Associated with the Business of the Company" included in
this Annual Report on Form 10-K, as well as "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" contained herein, for
a more complete discussion of certain risk factors.

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

  NOVA Corporation Common Stock is traded on the New York Stock Exchange (its
principal market) under the symbol NIS.

  The following table provides the high and low sales prices of the common stock
as reported for the periods indicated:
    
<TABLE>
<CAPTION>
                         1998                          1997
                         ----                          ----
                         High           Low            High           Low
<S>                      <C>            <C>            <C>            <C>
First Quarter            $33.3750       $23.0000       $23.5000       $12.8750
Second Quarter           $36.3750       $31.0000       $26.5625       $15.6250
Third Quarter            $37.1875       $25.7500       $29.1250       $23.5000
Fourth Quarter           $34.6875       $24.2500       $30.8125       $23.2500
</TABLE>

  The Company has never paid cash dividends on its Common Stock.  The Board of
Directors' policy is to retain any available earnings for use in the operation
and expansion of the Company's business.  Therefore, no payment of cash
dividends is likely in the foreseeable future.  The Company's loan agreement
restricts the payment of dividends.  See Note 8 of the accompanying Consolidated
Financial Statements.     


RECENT SALES OF UNREGISTERED SECURITIES

  In January 1998, NOVA granted Kessler Financial Services, L.P. ("Kessler")
warrants to purchase 50,000 shares of common stock of NOVA (the "Kessler
Warrants"). The Kessler Warrants were granted as consideration for Kessler
providing to NOVA certain marketing and referral services pursuant to a
marketing agreement. The transaction was effected in reliance upon the exemption
from registration set forth in Section 4(2) of the Securities Act.

ITEM 6.  SELECTED FINANCIAL DATA
    
<TABLE>
<CAPTION>
                                       1998              1997           1996            1995            1994
                                       ----              ----           ----            ----            ----
                                                        (In thousands, except per share data)
 <S>                                <C>                <C>            <C>             <C>             <C>
  Revenues......................    $1,145,664         $680,872       $529,279        $292,698        $203,794
 Net Income (loss)..............       (12,779)          37,899         19,148          11,265           2,357
 Total Assets...................       622,533          426,432        341,323         150,153         105,155
 Total long-term debt...........        23,025           52,001         22,175          50,176          32,954
 Per common share:
 Earnings-Basic.................         (0.18)            0.60           0.32            0.25              --
        Diluted.................         (0.18)            0.58           0.32            0.25              --
 Cash dividends declared........            --               --             --              --              --
</TABLE>
     
  This summary unaudited combined condensed financial information reflects the
September 1998 PMT Merger which was accounted for as a pooling-of-interests;
accordingly, the separate historical financial results of NOVA and PMT have been
combined in this table and throughout the Annual Report.




                                      25
<PAGE>
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATION

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

OVERVIEW

    
  Since the incorporation of NOVA's predecessor, NOVA Information Systems, in
February 1991, NOVA Corporation has grown in dollar volume processed to become
one of the five largest integrated transaction processor in the United States,
leading to significant increases in revenues and improved operating
efficiencies. This growth has been fueled by NOVA's marketing programs and
through a series of strategic merchant portfolio purchases and acquisitions,
joint venture agreements, and long-term banking alliances that provide a channel
for merchant portfolio purchases, as well as long-term exclusive marketing
arrangements.      

  NOVA's portfolio purchases, joint venture investments, and marketing alliances
provide significant strategic and financial benefits including: (1) enhanced
distribution channels to facilitate growth in transaction volume, (2) expansion
of the number of merchant locations served, (3) further geographic
diversification of NOVA's portfolio, and (4) economies of scale derived from
substantial increases in transaction processing volume.

SIGNIFICANT DEVELOPMENTS

 
  The PMT Merger enables NOVA to integrate two unique sales channels, while
leveraging NOVA's existing in-house technologies of NOVA. Following the PMT
Merger, NOVA has continued to focus on the processing sector comprised primarily
of small- to medium-sized merchants, who historically have been overlooked and
could benefit from the advantages of value-added services usually offered only
to large merchants. The ISOs that operate as subsidiaries of PMT provide an
existing customer pipeline for processing over the NOVA Network and NOVA's
sophisticated client/server platforms. From its origin, NOVA has invested
significant capital to develop, expand and enhance an integrated technology
platform of hardware, software applications and network architecture to process
large volumes of transactions.

  Concurrent with the PMT Merger in the third quarter of 1998, NOVA recorded
transaction costs of $15.5 million. During the fourth quarter of 1998, as the
plans for the integration and consolidation of PMT were finalized, NOVA
recognized an additional $75.2 million as the cost of implementing these plans.
In December 1998, NOVA announced its plan to accelerate the conversion and
integration of PMT's customer base from existing third-party providers to the
NOVA Network.  Although this strategy will result in increased costs in 1999,
management believes it will benefit NOVA's long-term performance by improving
customer service and decreasing merchant attrition, and accelerating the
elimination of redundant selling, general and administrative functions of the
two companies. Management continues to examine and evaluate the operational
efficiencies which may result from the PMT Merger in order to leverage NOVA's
financial position and focus on its strengths in business lines, products and
services, as well as market share.

  In January 1998, NOVA and KeyBank completed a transaction pursuant to which
KeyBank contributed merchant contracts to KMS. Pursuant to this agreement, NOVA
provides transaction processing services to the merchant customers of KMS and is
responsible for its operation and management.  NOVA owns a 51% controlling
interest in KMS.  During 1998, KMS contributed processed volume in excess of
$5.3 billion to NOVA's operating platform. In addition to KMS's direct sales
force, KeyBank exclusively markets and promotes NOVA's transaction processing
services on behalf of KMS through KeyBank's bank branch locations.  In
connection with the formation of KMS, NOVA began the consolidation and
conversion of the existing merchant processing to NOVA's operating platforms.
Associated with this process and concurrent with consummating the transaction,
NOVA recognized a non-recurring charge of $2.0 million to account for the early
termination of a contract with a third party processor.
    
  In October 1997, NOVA consummated the Elan joint venture with Firstar whereby
Firstar contributed substantially all of its then existing merchant bankcard
processing portfolio to Elan. Pursuant to the Elan joint venture, NOVA provides
transaction processing services to the merchant customers of Elan and is
responsible for its operation and management. NOVA owns a 51% controlling
interest in the Elan joint venture. During 1998, Elan contributed processed
volume in excess of $3.0 billion to NOVA's operating platforms. Firstar markets
and promotes, on an exclusive basis, the merchant transaction processing
services of NOVA on behalf of Elan through a network of correspondent financial
institutions.     

                                      27

<PAGE>
  Integral to NOVA's significant revenue expansion has been the selective
purchases of merchant processing portfolios.  Most notable in 1998 was the
October 1998 purchase of the merchant processing portfolio of FUBD, successor by
merger to CoreStates Bank.

  The CoreStates portfolio added geographical diversity and strength to NOVA's
merchant customer base through the portfolio's approximate $3.1 billion in
annual processing volume.

  On December 31, 1997, NOVA purchased substantially all of MBNA's merchant
portfolio. MBNA also agreed to market the merchant processing services of NOVA
through an exclusive referral arrangement for all merchants, trade associations,
financial institutions, ISOs, and other organizations that express to MBNA an
interest in merchant processing services. The MBNA portfolio contributed
approximately $1.1 billion in annualized credit and debit card processing volume
in 1998.

  Prior to the PMT Merger and since fiscal 1997, PMT completed three significant
merger transactions with ISOs: Superior Bankcard Service, Inc. ("Superior") in
July 1998, MBN National, Inc. ("MBN") in May 1998, and Bancard, Inc. ("BCI") in
October 1997. PMT previously accounted for each of these acquisitions as a
pooling of interests transaction. Accordingly, all years presented have been
restated to reflect the operations of each entity. 


<PAGE>
 
Revenues recognized during 1998 for the Superior, MBN and BCI operations were
$31.7 million, $15.3 million and $76.9 million, respectively.

  Historically, NOVA has achieved savings through economies of scale and
operating efficiencies derived from the conversion and integration of its
purchased portfolios.  The costs of these conversion activities are expensed as
incurred. As a result of the PMT Merger, the magnitude, scope, timing, duration
and expense of conversion and consolidation will, in the aggregate, be
significant. Failure to complete the conversion and consolidation in accordance
with management plans could have a material adverse effect on NOVA's financial
condition and results of operations.

                                       27
<PAGE>
 
COMPONENTS OF REVENUES AND EXPENSES

                                   REVENUES
                                        
  NOVA derives revenues principally from electronic processing of credit, charge
and debit card transactions that are authorized and captured through the NOVA
Network and through third-party networks prior to conversion.  Typically
merchants are charged for these processing services at a bundled rate that is a
percentage of the dollar amount of each transaction and, in some instances,
additional fees per transaction.  These charges, referred to as "merchant
discount", are negotiated with each merchant and, in the aggregate, represent in
excess of 90% of NOVA's revenues.  Certain merchant customers are charged a flat
fee per transaction, while others may also be charged miscellaneous fees,
including fees for handling chargebacks, monthly minimums, equipment rentals,
sales or leasing, and other miscellaneous services.   Revenues are reported net
of amounts paid to ISOs, agent banks and merchant associations under revenue
sharing agreements pursuant to which such parties receive payments based
primarily on processing volume for particular groups of merchants.

EXPENSES

  Cost of service includes costs directly attributable to the furnishing of
transaction processing and other services to NOVA's merchant customers.  The
most significant components of cost of service include interchange and
assessment fees, which are charged by the credit card associations for clearing
services, advertising and other expenses.  Interchange and assessment fees are
billed primarily as a percent of dollar volume processed and, to a  lesser
extent, as a per-transaction fee. Cost of service also includes charges paid to
third parties for POS network service (for merchant customers acquired but not
yet converted to the NOVA Network), merchant accounting and settlement fees,
cost of equipment leased, rented or sold, NOVA Network costs and other direct
operating expenses.

  Conversion costs include expenses incurred to convert acquired portfolios from
existing processing platforms to the NOVA Network and operating systems. Such
costs are expensed as incurred and these costs include expenses related to
reprogramming POS terminals at merchant locations, duplicate costs to process
transactions prior to conversion, unfavorable contract payments for transaction
authorizations, and independent contractor fees.

  Selling, general and administrative expenses include salaries and wages,
commissions, employee benefits, travel and entertainment, telecommunications,
and other costs of the operations and marketing centers, subsidiary offices, and
corporate headquarters.  Depreciation and amortization costs are related to
NOVA's capital expenditures, merchant portfolio purchases and business
acquisitions.

                                       28

<PAGE>
 
RESULTS OF OPERATIONS

  The following table for the years ended December 31, 1998, 1997, and 1996 sets
forth the percentage of total revenues represented by certain items on NOVA's
consolidated statements of operations:

                          PERCENTAGE OF TOTAL REVENUES
    
<TABLE> 
<CAPTION> 
                                                                     1998             1997           1996
                                                                    ------           ------         ------
<S>                                                                 <C>              <C>            <C>
Revenue                                                             100.0%           100.0%         100.0%
-----------------------------------------------------------------------------------------------------------
Cost of service                                                      77.3             76.3           76.9
-----------------------------------------------------------------------------------------------------------
Conversion costs                                                      0.9              0.4            1.2
-----------------------------------------------------------------------------------------------------------
Selling, general and administrative                                  10.5             11.2           13.1
-----------------------------------------------------------------------------------------------------------
 and amortization                                                     3.9              3.5            2.9
-----------------------------------------------------------------------------------------------------------
Merger and consolidation expenses                                     7.9              0.3            0.0
-----------------------------------------------------------------------------------------------------------
Operating income (loss)                                              (0.5)             8.4            5.9
-----------------------------------------------------------------------------------------------------------
Interest income                                                       0.6              0.9            0.7
-----------------------------------------------------------------------------------------------------------
Interest expense                                                     (0.5)            (0.6)          (1.0)
-----------------------------------------------------------------------------------------------------------
 interest in income of subsidiaries                                  (0.9)            (0.1)           ---
-----------------------------------------------------------------------------------------------------------
Other income                                                          ---              ---            0.2
-----------------------------------------------------------------------------------------------------------
(Loss) income before (benefit) provision for income taxes            (1.3)             8.6            5.8
-----------------------------------------------------------------------------------------------------------
(Benefit) provision for income taxes                                 (0.2)             3.0            2.1
-----------------------------------------------------------------------------------------------------------
Net (loss) income                                                    (1.1)             5.6            3.7
-----------------------------------------------------------------------------------------------------------
</TABLE>
     
YEAR ENDED DECEMBER 31, 1998, COMPARED WITH YEAR ENDED DECEMBER 31, 1997

                                   REVENUES
                                        
     NOVA's revenue increased $464.8 million, or 68.3%, to $1.1 billion for the
year ended December 31, 1998, compared with $680.9 million for the same period
in 1997. This revenue growth is primarily attributable to a 61.7% increase in
merchant sales processing volume to $47.5 billion from $29.4 billion in 1997. Of
the total increase, approximately $8.1 billion in volume and $195.8 million in
revenues are attributable to the Elan and KMS joint ventures. Other purchases,
in the aggregate, contributed approximately $4.7 billion in volume and $109.2
million in revenues over 1997 levels. The pass-through of higher interchange
rates from the credit card associations in the form of higher discount rates
accounts for approximately $40.0 million of the increased revenues. The
remaining increase is primarily due to internal growth and bank marketing
relationships.

COST OF SERVICE

     Cost of service increased $366.2 million, or 70.5%, to $885.6 million for
the year ended December 31, 1998, from $519.4 million for the same period in
1997. The increase resulted from additional interchange and assessment fees and
other operating costs associated with the higher merchant sales volume
processed. Incremental increases were also recognized for interchange expenses
as a result of credit card association rate increases. Cost of service as


                                      29
<PAGE>
 
a percentage of revenue increased to 77.3% from 76.3% because a substantial
portion of the volume from recent portfolio purchases and joint venture
transactions has not been converted to the NOVA Network and therefore is being
processed by third party vendors at a higher cost.

CONVERSION COSTS
    
     Conversion costs increased $7.4 million over 1997 levels to $10.0 million
in 1998. This increase relates to the increased conversion efforts in 1998 as
compared to 1997, including the conversions the KMS and Elan joint ventures, and
the MBNA and CoreStates merchant portfolios. Conversion activity for 1999 is
expected to exceed 1998 levels due to the magnitude of the conversion of PMT's
portfolios.     

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses were $120.2 million in 1998,
an increase of $44.1 million, or 58.0%, over 1997 expenditures of $76.0 million.
Included in this expense classification are approximately $14.2 million in
unusual charges recorded in the fourth quarter associated with the PMT Merger.
Such charges primarily result from changes in management estimates pertaining to
collectibility of accounts receivable ($6.2 million), merchant credit and fraud
loss reserves ($4.7 million), and state sales and use tax reserves ($2.0
million), particularly in light of the possible effects that consolidation
activities may have.

     After consideration of these charges, other selling, general and
administrative expense's increased 39.3%. These increases are attributable to
(i) the costs paid to sellers for operating and managing merchant portfolios
during transition and conversion of the portfolios to the NOVA Network and (ii)
an expanded sales force associated with marketing arrangements entered into, in
each case, in conjunction with recent portfolio purchases and joint venture
transactions. In addition, during the third and fourth quarters of 1998, NOVA
incurred additional personnel and facilities costs in anticipation of beginning
the transition of all operational functions for the PMT merchant portfolios
beginning in October 1998. Many of these costs are duplicative of costs incurred
in connection with existing PMT operations that will be eliminated as part of
the integration of PMT onto the NOVA Network.

     Selling, general and administrative expenses as a percentage of revenue
decreased in 1998 to 10.5% from 11.2% in 1997.  Adjusted for the unusual costs
included in 1998, these expenses represented 9.2% of revenues, illustrating the
significant economies of scale resulting from NOVA's growth.

DEPRECIATION AND AMORTIZATION

     Depreciation and amortization expenses increased 90.0% to $44.8 million in
1998 compared to $23.6 million in 1997 due primarily to amortization expenses
associated with recent portfolio purchases and investments in joint ventures.

MERGER AND CONSOLIDATION EXPENSES

     As a result of the PMT Merger and other acquisitions completed by PMT
during 1998, NOVA recorded a $90.7 million charge in 1998. This charge was
primarily related to direct transaction costs, charges associated with the
consolidation and closure of PMT's corporate headquarters and certain operating
subsidiaries, contract termination costs related to unfavorable third party
processing contracts, and the decision to exit certain of PMT's sales
distribution channels.

     Direct merger transaction costs are primarily for investment banking
commissions, professional fees, and regulatory filing expenses.

     The primary costs associated with the consolidation and closure of
facilities include employee and executive severance, estimated unrecoverable
future lease obligations on vacated facilities, and the write-down of capital
assets to their net realizable value. The consolidation and closure actions
result from the elimination of overlapping functions, primarily customer
service, accounting, and administrative areas. The total number of employees
terminated was approximately 275, with 210 having received severance packages as
of December 31, 1998. The remaining employees will leave NOVA during the first
quarter of 1999. NOVA began the process of moving PMT's

                                      30
<PAGE>
 
operations located in Nashville, Tennessee to other locations in December 1998,
and expects the process to be completed in the first quarter of 1999, at which
time the premises in Nashville will be completely vacated.

     Consistent with past practice, management developed a plan in 1998 to
convert the front-end and back-end transaction processing of PMT's merchants to
the NOVA Network. As a result of this action, NOVA negotiated the termination of
certain long-term processing contracts between PMT and third-party processors
which resulted in early termination fees. The majority of these terminations
were finalized and paid in 1998. NOVA expects to complete the negotiation and
payment of the remaining contracts during the first half of 1999.

     Capital asset write-downs are substantially attributable to the computer
software and equipment, including PMT's management information and financial
reporting systems which were abandoned in December 1998. Additional assets
written down include telephone systems, and office furniture and equipment that
will not be redeployed for use at another NOVA facility.

     In 1998 management formulated plans to exit unique distribution channels
based upon the type of merchant business generated through these channels.
Specifically, servicing and maintaining the type of merchant generated through
these channels is not compatible with NOVA's operating philosophy and not
strategically aligned with NOVA's plan of business. The charge related to
exiting this distribution channel includes a contract termination fee and the
write-down of certain related intangible assets resulting from an analysis of
discounted future cash flows generated from the subject merchants.

     The majority of these costs were paid in the fourth quarter of 1998 and the
Company expects the plans associated with the remaining costs to be
substantially complete during the first half of 1999. Details of merger related
charges, including charges relating to the PMT merger are as follows:
    
<TABLE>
<CAPTION>
(IN THOUSANDS)
                                                CASH/                                 RESERVE BALANCE AT     
<S>                                            <C>         <C>         <C>           <C>                   
DESCRIPTION                                    NON-CASH     CHARGE     ACTIVITY      DECEMBER 31, 1998 (1)   
----------------------------------------------------------------------------------------------------------    
Direct transaction costs.....................  Cash        $15,515     $(11,412)                   $ 4,103   
----------------------------------------------------------------------------------------------------------    
Severance packages...........................  Cash         14,050       (1,404)                    12,646   
----------------------------------------------------------------------------------------------------------    
Lease abandonment............................  Cash          4,658           --                      4,658   
----------------------------------------------------------------------------------------------------------    
Contract termination charges.................  Cash         35,506      (13,689)                    21,817   
----------------------------------------------------------------------------------------------------------    
Asset write-down.............................  Non-cash      7,121       (7,121)                        --   
----------------------------------------------------------------------------------------------------------    
Costs to exit a distribution channel.........  Non-cash     11,370      (11,370)                        --   
----------------------------------------------------------------------------------------------------------    
Costs to exit a distribution channel.........  Cash          2,500           --                      2,500   
----------------------------------------------------------------------------------------------------------    
Total                                                      $90,720     $(44,996)                   $45,724   
==========================================================================================================
</TABLE>
     

(1)  Represents reserve balances of $35.0 million at October 31, 1998, for PMT.
     Approximately $15.8 million of these reserves were paid as of February 19,
     1999.

     Future cash outlays are anticipated to be completed by the end of 1999,
excluding certain lease commitments that will continue through August 2007 if
the Company is unable to sublease this space.

                                       31
<PAGE>
 
OPERATING LOSS

     NOVA's consolidated operating loss for 1998 was $5.6 million, as compared
to operating income of $57.4 million during 1997. The loss in 1998 includes non-
recurring merger and consolidation charges of $90.7 million and $14.2 million in
unusual selling, general and administrative costs. The 1997 operating income
included a $1.9 million merger related charge incurred by PMT. Absent the merger
and consolidation charges and unusual costs, operating income would have been
$99.3 million in 1998 compared to $59.2 million in 1997, an increase of $40.1
million, or 67.7%, due to the factors noted above.

INTEREST INCOME AND EXPENSE

     Interest income increased 4.8% to $6.6 million in 1998, compared to $6.3
million in 1997. NOVA had higher average cash balances during 1998 due to a
public offering of common stock in April 1998 that yielded net proceeds of
$142.6 million.

     Interest expense increased 36.4% to $6.0 million in 1998, compared to $4.4
million in 1997, due to higher average debt obligations outstanding in 1998.
Average borrowings increased due to draws against NOVA's bank credit facility in
late 1997 and early 1998 to fund the Elan and KMS investments and the MBNA
portfolio purchase. In addition, NOVA recorded deferred purchase obligations in
January 1998 related to the KMS investment. Although all bank borrowings were
repaid during the second quarter using a portion of the offering proceeds, NOVA
continued to incur interest expense throughout the year related to the deferred
purchase obligation.

MINORITY INTEREST IN INCOME OF SUBSIDIARIES
    
     Minority interest in income of subsidiaries increased to $10.1 million in
1998 from $776,000 in 1997. This increase reflects the ten-month incremental
inclusion of Elan and approximately eleven months incremental inclusion of KMS.
     
INCOME TAXES

     NOVA's effective tax rate for 1998 was approximately 15.6%, compared with
an effective income tax rate of 35.2% for 1997. The decrease in the effective
rate primarily reflects the impact of the non-deductible portion of the merger
costs incurred in connection with the PMT Merger. Excluding the effect of the
non-deductible charges and the effect of Subchapter S corporation income which
is not subject to income tax, the effective tax rate for 1998 would be 40.4%.
The increase from the 1997 comparable rate of 38.2% is due to an increase in
state tax rates.

NET LOSS

     A net loss of $12.8 million, or $0.18 per share, in 1998 compares to net
income in 1997 of $37.9 million, or $0.58 per share.  Excluding both years'
merger related charges and the unusual selling, general and administrative
charges recognized during 1998, net income for 1998 of $57.9 million represented
an increase of approximately 45.5% over net income of $39.8 million in 1997 due
to the factors noted above.

YEAR ENDED DECEMBER 31, 1997 COMPARED WITH YEAR ENDED DECEMBER 31, 1996

REVENUES
    
     Revenues increased $160.5 million, or 30.8%, to $680.9 million for the year
ended December 31, 1997, compared to $520.4 million for the year ended December
31, 1996.  The increase resulted from a 29.7% growth in merchant sales volume
processed to $29.4 billion in 1997, compared to $22.7 billion in 1996.  Of these
increases, $1.5 billion in sales volume processed and $34.0 million in revenues
is attributable to the Elan joint venture and the Crestar portfolio purchase.
Other individually insignificant portfolio purchases, in the aggregate,
contributed approximately $3.7 billion in volume and $84.2 million in revenues
over 1997 levels. The remaining increase is primarily due to internal growth and
bank marketing relationships.     

                                       32
<PAGE>
 
COST OF SERVICE

     Cost of service increased $119.3 million, or 29.8%, to $519.4 million for
the year ended December 31, 1997, from $400.1 million for the same period in
1996. Additional interchange and assessment fees and other direct operating
costs associated with the incremental increase in volume processed contributed
to the increase in expenses. Cost of service as a percentage of revenues
decreased slightly from 76.9% to 76.3%, reflecting cost efficiencies arising
from proportionately lower payments to third-party networks. This trend reflects
the substantial completion during 1996 of the conversion of the First Union
portfolio purchased in 1995, resulting in fewer merchant customers utilizing
external service providers during 1997 as compared to 1996.

CONVERSION COSTS

     Conversion costs decreased 59.4% to $2.6 million for 1997 compared with
$6.4 million for 1996. The decrease resulted primarily from the substantial
completion of the conversion of the First Union merchant portfolio in 1996.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses increased 11.7% to $76.0
million for the year ended 1997, compared with $68.1 million for the year ended
1996. Higher expenses in 1997 resulted from increased personnel support in
NOVA's primary operations center due to transaction volume growth. This growth
also accounts for the decrease in expenses as a percentage of revenue to 11.2%
in 1997 as compared to 13.1% in 1996.

DEPRECIATION AND AMORTIZATION

     Depreciation and amortization expenses increased 57.4% to $23.6 million in
1997 compared to $15.0 million in 1996. The principal component of this increase
was the incremental addition of amortization expense from merchant portfolio
purchases. Other factors contributing to this increase were significant capital
investments in the technology infrastructure to expand transaction processing
capacity.

INTEREST INCOME AND EXPENSE
    
     Interest income increased 85.3% to $6.3 million for fiscal year 1997,
compared with interest income of $3.4 million for fiscal year 1996. During 1996,
NOVA made three public offerings of stock and generated $206.3 million in net
proceeds. The offerings, which occurred primarily during the second and third
quarters of 1996, resulted in substantially higher average cash balances during
fiscal 1997, generating greater interest income.     

     Interest expense decreased 17.0% to $4.4 million in 1997 compared to $5.3
million in 1996. The favorable trend in interest expense is attributable to
using a portion of the 1996 offering proceeds to reduce outstanding debt.

INCOME TAXES

     NOVA's effective tax rate for 1997 was approximately 35.2%, compared with
an effective income tax rate of 36.3% for 1996. The decrease from the 1996
effective rate primarily reflects the impact of pooling transactions in 1997
with Subchapter S Corporations that are not subject to income tax.

NET INCOME

     Net income increased to $37.9 million, or $0.58 per share, in 1997 from net
income of $19.1 million, or $0.32 per share, in 1996, due to the factors
discussed above.

LIQUIDITY AND CAPITAL RESOURCES

     NOVA's primary uses of its capital resources include the purchase of
merchant portfolios, investments in joint ventures, capital expenditures and
working capital requirements. 

                                       33
<PAGE>
 
     
     NOVA produces significant cash flow from operating activities, amounting to
$37.8 million in 1998, $42.2 million in 1997, and $42.2 million in 1996.  Cash
flow is generated primarily from operating earnings, after considering the
effect of depreciation and amortization and, for 1998, the non-cash portion of
the merger and consolidation charges.  These cash flows are significantly
impacted by increases in trade receivables, primarily in 1998 and 1997, directly
attributable to the increases in processing volume and revenues.  During 1998,
deferred tax assets resulting from merger related timing differences also had a
significant unfavorable affect on cash flows from operating activities.
Investing activities utilized a net $108.0 million cash in 1998, compared to
$182.1 million in 1997, and $52.9 million in 1996. Significant 1998 investments
include $91.1 million for portfolio purchases, $46.4 million in enhancing and
improving the technology platforms and operating centers, and $27.9 million to
fund equipment leases. The nature of these uses is consistent with historical
uses.     

    
     Net cash provided by financing activities was $94.4 million, $15.9 million,
and $157.5 million for the years ended December 31, 1998, 1997, and 1996,
respectively. NOVA's financing sources during 1998 relate primarily to a stock
offering completed in April 1998, which provided $142.6 million, net of
expenses, and bank borrowings totaling $21.8 million.  Subsequent to the public
offering, NOVA used $53.1 million of the net proceeds to repay amounts
outstanding under its bank credit facilities.  Net cash provided in 1997
consists primarily of proceeds received from short-term and long-term debt
obligations, offset for cash outlays for the issuance of a note receivable of
$8.8 million.     

    
     NOVA has available a credit facility of $80.0 million which is expandable
to $100.0 million. At December 31, 1998, no borrowings were outstanding under
this facility. See Note 8 to the Consolidated Financial Statements. In
connection with the PMT Merger and other acquisitions closed in 1998 and 1999,
NOVA obtained a waiver of certain covenants under the credit facility, which is
effective for all applicable periods.     

    
     NOVA typically has relatively low working capital requirements because
merchant discount fees charged are collected in an average of 20 days, while
normal vendor payables are paid in 30 days or longer.  In addition, acquisition
activity may cause variations in working capital due to conversion period
operating costs and the transition in the payment of expenses and the collection
of receivables from the former processor to NOVA.  Because of the seasonality of
NOVA's business, capital requirements may be greater in certain months.     

     NOVA anticipates that it will incur approximately $25.0 million in capital
expenditures during 1999 for upgrading and expanding existing facilities and the
expansion and enhancement of its information systems.  Such investments are
generally attributable to the closure and consolidation of the PMT operations
and the migration of the PMT merchants to the NOVA Network.  Since electronic
transaction processing is virtually all technology based, NOVA expects to
continue the trend in capital investments in its technology infrastructure and
solutions for the foreseeable future.  However, there can be no assurances that
NOVA will not incur higher capital expenditures in 1999 and 2000 to support the
business.

     NOVA believes its existing cash and cash equivalents, cash generated from
operations, and available credit facilities are sufficient to fund future
merchant portfolio purchases, capital investment needs, and working capital
requirements for the foreseeable future.

YEAR 2000 COMPLIANCE

     The Year 2000 Issue is the result of date sensitive computer software
programs being written using two digits rather than four digits to define the
applicable year. Consequently, unless corrected, computer software programs will
be unable to read and accurately process date information on or after the year
2000. NOVA has critical reliance on technology systems, telecommunications
systems, facilities infrastructure and embedded systems, such as heating and
ventilation systems, in conducting its business. NOVA also has business
relationships with third party providers, such as telecommunication vendors,
financial institutions, and data processors, who are highly reliant on
information technology and other systems to conduct their business.

     Due to the significance of technology systems and other support systems, in
1997 NOVA launched its Year 2000 compliance efforts with a comprehensive
evaluation of its critical systems, applications, computing platforms, and
merchant terminals to ensure potential risks are identified and non-compliant
information systems upgraded or

                                       34
<PAGE>
 
replaced. The initial phase of the project was the identification of all
technology systems and determining which were at risk. After completion of this
phase, steps were taken to remediate and test those systems initially determined
to be non-compliant.

     In June 1997, VISA U.S.A. and Mastercard International certified NOVA as
capable of processing transactions for cards issued with expiration dates of
2000 and beyond. Also completed in 1997 was the validation and correction of
merchant terminals for Year 2000 functionality. In 1998, NOVA substantially
completed the review and correction of its identified systems. As an added
measure of validation, an independent review and evaluation was initiated for
the following: building infrastructure, client/server platforms, NOVA Network,
software applications, principal and strategic vendors' products or services,
and telecommunication platforms and equipment. NOVA believes that its Year 2000
project is on schedule and expects completion by mid 1999.

     Through 1998, NOVA has replaced or upgraded personal computers,
client/server applications, and certain computer software programs to be Year
2000 compliant. The nature of NOVA's business requires continuous development of
its technologies and systems, extensively utilizing internal resources in this
effort. Accordingly, it is difficult to determine with certainty the costs that
have been incurred to date, and costs expected to be incurred in the future to
support the Year 2000 effort.

     Despite NOVA's efforts, there cannot be absolute assurance that NOVA will
be completely successful in eliminating all business and operations risk. The
risks associated with the Year 2000 Issue include the possibility of a failure
of the information and non-information technology systems. System malfunction or
failure could result in incomplete or inaccurate transaction processing.
Additionally, NOVA may be adversely affected by a system malfunction or failure
of third parties that hold a business, financial or operational relationship
with NOVA; such as processing banks, telecommunication providers, and utilities.
If these third parties fail to adequately address Year 2000 issues, NOVA could
experience a negative impact on its business operations, such as business
interruption or shutdown. The consequences of interruption could cause NOVA to
suffer a material adverse impact on its financial condition and results of
operations.

     NOVA has begun to develop contingency and recovery plans as a precautionary
measure targeted at ensuring the continuation and continuity of critical
business functions before and after December 31, 1999.   NOVA will continue to
identify aspects of its business and that of its third-party providers and take
necessary corrective action, primarily the expedient replacement of any critical
vendor who does not provide proof of compliance.  The contingency efforts
described above are expected to minimize the business risk connected to the Year
2000 Issue.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Interest Rates: NOVA is exposed to changes in interest rates due to
variable rate debt facilities. Based on the Company's debt profile at December
31, 1998, and 1997, a 1% increase in market interest rates would increase
interest expense and decrease income before income taxes by $744,000, and
$200,000, respectively. These amounts were determined by calculating the effect
of the hypothetical interest rate on our debt.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
     FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION APPEARS ON PAGES 1-29 TO
EXHIBIT 13 OF THIS REPORT.      

    
     

                                   PART III
                                        
     Certain information required by Part III is omitted from this report but is
incorporated herein by reference to NOVA's definitive Proxy Statement for the
1999 Annual Meeting of Shareholders (the "Proxy Statement"). Such Proxy
Statement will be filed with the Securities and Exchange Commission no later
than 120 days after December 31, 1998.

                                       35
<PAGE>
 
    
     

                                    PART IV
                                        
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)  DOCUMENTS FILED AS PART OF THIS REPORT

     1.   Financial Statements
    
     The consolidated financial statements of NOVA and the related reports of
independent auditors thereon which are required to be filed as part of this
Report are included in NOVA's 1998 Annual Report to Shareholders are filed as
part of Exhibit 13 to this Report on pages 1 - 28.

     2.  Financial Statement Schedules
     See Index to Financial Statements on page  29.      

3.   EXHIBITS

     The following exhibits are incorporated by reference or filed herewith:

                                       36
<PAGE>
 
     
EXHIBIT
NUMBER       DESCRIPTION
------       -----------

  2.1     Agreement and Plan of Merger dated as of June 17, 1998, among the
          Registrant, Church Merger Corp. and PMT Services, Inc.(8)

  3.1     Articles of Incorporation of the Registrant, as amended(1)

  3.2     Bylaws of the Registrant, as amended(2)

  4.1     Specimen Common Stock certificate(1)

  4.2     See Articles of Incorporation of the Registrant and Bylaws of the
          Registrant, filed as Exhibits 3.1 and 3.2, respectively
 
  4.6     Registration Rights Agreement, dated as of June 17, 1998, by and among
          the Registrant, Richardson M. Roberts and Gregory S. Daily(8)

  4.7     Registration Rights Agreement dated January 31, 1996, among the
          Registrant (formerly NOVA Holdings, Inc.), Warburg, Pincus Investors,
          L.P., WorldCom, Inc., and First Union Corporation(1)

 10.1     Shareholders Agreement, incorporated by reference to Exhibit 4.3(1)

 10.2     Shareholder Agreement, incorporated by reference to Exhibit 4.4(8)
 10.3     Shareholder Agreement, incorporated by reference to Exhibit 4.5(8)
      
 10.4     Registration Rights Agreement, incorporated by reference to Exhibit
          4.6(8)
      
 10.5     Registration Rights Agreement, incorporated by reference to Exhibit
          4.7(1)
      
 10.6     PMT Services, Inc. 1997 Nonqualified Stock Option Plan(9)
      
 10.7     PMT Services, Inc. 1994 Non-Employee Director Stock Option Plan(9)
      
 10.8     PMT Services, Inc. 1994 Incentive Stock Plan(9)
      
 10.9     1991 Employees Stock Option and Stock Appreciation Rights Plan as
          mended (1)

 10.10    1996 Employees Stock Incentive Plan, as amended by the First Amendment
          (1), the Second (8) and the Third Amendment (10)
       
 10.11    1996 Directors Stock Option Plan, as amended and restated(10)
       
 10.12    Contribution Agreement, dated October 30, 1995, among the Registrant
          (formerly NOVA Holdings, Inc.), NOVA Information Systems, Inc., the
          then-current shareholders of NOVA Information Systems, Inc., First
          Union Corporation, the First Union Banks, and First Fidelity
          Bancorporation and its banking subsidiaries(1)
       
 10.13    Lease Agreement dated May 31, 1996, by and between NOVA Information
          Systems and Concourse I, LTD.(3)
       
 10.14    Sublease, dated April 1, 1991, between Inter-Banc, Inc. and The
          Baptist Health System of East Tennessee, Inc.(1)
     
                                       37
<PAGE>
 
   10.15  Credit Agreement, dated October 27, 1997, among NOVA Information
          Systems, the Lenders named therein, First Union National Bank as
          Documentation Agent and Bank of America National Trust and Savings
          Association, as Agent(6)
       
   10.16  Service Agreement dated July 2, 1998, between NOVA Information Systems
          and WorldCom Technologies, Inc.(11)
       
   10.17  Processing Services Agreement, dated July 1, 1998, between NOVA
          Information Systems and Vital Processing Services, L.L.C.(11)

  *10.18  Marketing Agreement, dated June 30, 1994, between NOVA Information
          Systems and Kessler Financial Services, L.P.(1), and Addendum to
          Marketing Agreement dated July 24, 1997, effective January 1, 1997,
          between NOVA Information Systems and Kessler Financial Services,
          L.P.(6)

  *10.19  Agreement Regarding Merchant Processing Services and Other Matters,
          dated May 5, 1995, among NOVA Information Systems, First Alabama Bank
          and Regions Financial Corp.(1)

  *10.20  Agreement dated June 3, 1992, as amended December 9, 1992, and
          November 2, 1994, between NOVA Information Systems and Mellon Bank,
          together with the Letter Agreement dated June 3, 1992, between NOVA
          Information Systems and Mellon Bank relating to fees, as amended
          December 10, 1992, and June 10, 1997(1), both as amended by Letter
          Agreement June 10, 1997(6)

   10.21  Depositary and Processing Agreement, dated September 30, 1993, between
          NOVA Information Systems and Bank of the West(1) 10.22 Merchant
          Business Purchase Agreement, dated October 18, 1994, as amended
          November 30, 1994, and December 9, 1994, among NOVA Information
          Systems, Inc., the Bank of Boulder, Bolder Bancorporation and NOVA
          Newco, Inc.(1)
       
   10.23  Marketing Agreement, dated October 1, 1992, between NOVA Information
          Systems and MBNA America Bank, N.A.(1)
       
   10.24  Agreement Not to Compete, dated October 1, 1992, between NOVA
          Information Systems and MBNA America Bank, N.A.(1)
       
   10.25  Depositary and Settlement Agreement, dated January 31, 1996, among the
          Registrant (formerly NOVA Holdings, Inc.), NOVA Information Systems
          and FUNB(1)
       
   10.26  Marketing Support Agreement, dated January 31, 1996, among the
          Registrant (formerly NOVA Holdings, Inc.), NOVA Information Systems
          and the First Union Banks(1)
       
   10.27  Merchant Asset Purchase Agreement, dated May 29, 1997, between NOVA
          Information Systems and Crestar Bank(4)
       
   10.28  Agreement Respecting a Limited Liability Company, dated October 7,
          1997, by and among NOVA Information Systems, Firstar Bank U.S.A., N.A.
          d/b/a Elan Financial Services and Firstar Bank Milwaukee, N.A.(5)

  *10.29  Agreement Respecting a Limited Liability Company, dated December 12,
          1997, by and among the Registrant, NOVA Information Systems and Key
          Bank National Association(6)

  *10.30  Merchant Asset Purchase Agreement, dated December 30, 1997, by and
          between NOVA Information Systems and MBNA American Bank, N.A.(6)

   10.31  Merchant Asset Purchase Agreement, dated October 8, 1998, among the
          Registrant, Core States Bank of Delaware, N.A., First Union National
          Bank and NOVA Information Systems, Inc. (12)
       
   10.32  Stock Option Agreement dated June 17, 1998, between the Registrant (as
          issuer) and PMT Services, Inc.

                                       38
<PAGE>
 
  10.33   Stock Option Agreement dated June 17, 1998, between PMT Services, Inc.
          (as issuer) and the Registrant

  10.34   Employment Agreement, dated June 17, 1998, by and between Richardson
          M. Roberts and the Registrant(8)

  10.35   Employment Agreement, dated June 17, 1998, by and between Gregory S.
          Daily and the Registrant(8)

  10.36   Employment Agreement, dated July 31, 1998, effective March 1, 1998,
          between the Registrant and Rebecca L. Powell(11)

  10.37   Employment Agreement, dated July 31, 1998, effective March 1, 1998
          between the Registrant and Pamela A. Joseph(11)

  10.38   Employment Agreement, dated July 31, 1998, effective March 31, 1998,
          between the Registrant and John Perry(11)

  10.39   Employment Agreement, dated October 27, 1995, effective January 31,
          1996, between NOVA Information Systems and Edward Grzedzinski(1)

  10.40   Employment Agreement, dated October 27, 1995, effective January 31, 
          1996, between NOVA Information Systems and James M. Bahin(1)

  13.1    Consolidated Financial Statements**

  21      Subsidiaries of the Registrant
         
  23.1    Consent of Ernst & Young LLP.**

  23.2    Consent of PricewaterhouseCoopers LLP relating to the audited
          financial statements of PMT Services, Inc.**
          
  24      Powers of Attorney (included on the signature page of this Annual
          Report on Form 10-K/A, as amended).
         
  27      Financial Data Schedule
------
*    Confidential treatment pursuant to 17 CFR ((S)(S)) 200.80 and 230.406 has
been requested regarding certain portions of the indicated Exhibit, which
portions have been filed separately with the Commission.

**   Filed herewith.

(1)  Filed as an exhibit to the Company's Registration Statement on Form S-1
     (Registration No. 333-3287), and incorporated herein by reference.

(2)  Filed as an exhibit to the Company's Annual Report on Form 10-K for the
     fiscal year ended December 31, 1996, Commission File No. 1-14342, and
     incorporated herein by reference.

(3)  Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     quarter ended March 31, 1996,  Commission File No. 1-14342, and
     incorporated herein by reference.

(4)  Filed as an exhibit to the Company's Current Report on Form 8-K, Commission
     File No. 1-14342, and incorporated herein by reference.

                                      39
<PAGE>
 
(5)  Filed as an exhibit to the Company's Current Report on Form 8-K, Commission
     File No. 1-14342, and incorporated herein by reference.

(6)  Filed as an exhibit to the Company's Annual Report on Form 10-K for the
     fiscal year ended December 31, 1997, Commission File No. 1-14342, and
     incorporated herein by reference.

(7)  Filed as an exhibit to the Company's Registration Statement on Form S-1
     (Registration No. 333-45997), and incorporated herein by reference.

(8)  Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     quarter ended June 30, 1998, Commission file No. 1-14342, and incorporated
     herein by reference.

(9)  Filed as an exhibit to the Company's Registration Statement on Form S-8
     (Registration No. 333-64681), and incorporated herein by reference.

(10) Filed as an exhibit to the Company's Registration Statement on Form S-8
     (Registration No. 333-64683), and incorporated herein by reference.

(11) Filed as an exhibit to the Company's Registration Statement on Form S-4
     (Registration No. 333-61867), and incorporated herein by reference.

(12) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     quarter ended September 30, 1998, Commission file No. 1-14342, and
     incorporated herein by reference.

    
(B)  REPORTS ON FORM 8-K

     Report on Form 8-K/A filed on December 12, 1998, Commission file number 1-
     14342 in connection with the PMT Merger (financial statements included).

     Report on Form 8-K filed on October 9, 1998, Commission file number 1-14342
     in connection with the PMT Merger.

(C)  EXHIBITS

     All exhibits required by Item 601 of Regulation S-K are incorporated herein
     by reference or are filed herewith.      

                                      40
<PAGE>
 
     
                                  SIGNATURES
                                        
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, NOVA has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on the 23rd day of
April, 1999.

                                      By: /s/ Edward Grzedzinski
                                              ------------------
                                              Edward Grzedzinski
                                              Chairman of the Board,
                                              President and
                                              Chief Executive Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Amendment No. 1 to the Annual Report on Form 10-K has been signed
by the following persons on behalf of NOVA and in the capacities indicated on
April 23, 1999.

/s/  Edward Grzedzinski            Director, Chairman of the Board,
     -----------------------
     Edward Grzedzinski            President and Chief Executive
                                   Officer (Principal Executive Officer)
 
/s/  James M. Bahin                Director, Vice Chairman of the Board,
     -----------------------
     James M. Bahin                Chief Financial Officer and Secretary
                                   (Principal Financial and Accounting Officer)
 
/s/  Richardson M. Roberts *       Vice Chairman of the Board
     -----------------------
     Richardson M. Roberts
 
/s/  Gregory S. Daily *            Vice Chairman of the Board
     -----------------------
     Gregory S. Daily
 
/s/  Charles T. Cannada *          Director
     -----------------------
     Charles T. Cannada
 
/s/  Stephen D. Kane *             Director
     -----------------------
     Stephen D. Kane
 
/s/  Dr. Henry Kressel *           Director
     -----------------------
     Dr. Henry Kressel
 
/s/  George M. Miller, II *        Director
     -----------------------
     George M. Miller, II
 
/s/  Stephen E. Wall *             Director
     -----------------------
     Stephen E. Wall
 
* By: /s/ James M. Bahin
      ------------------
      James M. Bahin, as
      Attorney-in-Fact
     
                                      41

<PAGE>
     
EXHIBIT
NUMBER       DESCRIPTION
------       -----------

  2.1     Agreement and Plan of Merger dated as of June 17, 1998, among the
          Registrant, Church Merger Corp. and PMT Services, Inc.(8)

  3.1     Articles of Incorporation of the Registrant, as amended(1)

  3.2     Bylaws of the Registrant, as amended(2)

  4.1     Specimen Common Stock certificate(1)

  4.2     See Articles of Incorporation of the Registrant and Bylaws of the
          Registrant, filed as Exhibits 3.1 and 3.2, respectively
 
  4.6     Registration Rights Agreement, dated as of June 17, 1998, by and among
          the Registrant, Richardson M. Roberts and Gregory S. Daily(8)

  4.7     Registration Rights Agreement dated January 31, 1996, among the
          Registrant (formerly NOVA Holdings, Inc.), Warburg, Pincus Investors,
          L.P., WorldCom, Inc., and First Union Corporation(1)

 10.1     Shareholders Agreement, incorporated by reference to Exhibit 4.3(1)

 10.2     Shareholder Agreement, incorporated by reference to Exhibit 4.4(8)
 10.3     Shareholder Agreement, incorporated by reference to Exhibit 4.5(8)
      
 10.4     Registration Rights Agreement, incorporated by reference to Exhibit
          4.6(8)
      
 10.5     Registration Rights Agreement, incorporated by reference to Exhibit
          4.7(1)
      
 10.6     PMT Services, Inc. 1997 Nonqualified Stock Option Plan(9)
      
 10.7     PMT Services, Inc. 1994 Non-Employee Director Stock Option Plan(9)
      
 10.8     PMT Services, Inc. 1994 Incentive Stock Plan(9)
      
 10.9     1991 Employees Stock Option and Stock Appreciation Rights Plan as
          mended (1)

 10.10    1996 Employees Stock Incentive Plan, as amended by the First Amendment
          (1), the Second (8) and the Third Amendment (10)
       
 10.11    1996 Directors Stock Option Plan, as amended and restated(10)
       
 10.12    Contribution Agreement, dated October 30, 1995, among the Registrant
          (formerly NOVA Holdings, Inc.), NOVA Information Systems, Inc., the
          then-current shareholders of NOVA Information Systems, Inc., First
          Union Corporation, the First Union Banks, and First Fidelity
          Bancorporation and its banking subsidiaries(1)
       
 10.13    Lease Agreement dated May 31, 1996, by and between NOVA Information
          Systems and Concourse I, LTD.(3)
       
 10.14    Sublease, dated April 1, 1991, between Inter-Banc, Inc. and The
          Baptist Health System of East Tennessee, Inc.(1)
     

<PAGE>
   10.15  Credit Agreement, dated October 27, 1997, among NOVA Information
          Systems, the Lenders named therein, First Union National Bank as
          Documentation Agent and Bank of America National Trust and Savings
          Association, as Agent(6)
       
   10.16  Service Agreement dated July 2, 1998, between NOVA Information Systems
          and WorldCom Technologies, Inc.(11)
       
   10.17  Processing Services Agreement, dated July 1, 1998, between NOVA
          Information Systems and Vital Processing Services, L.L.C.(11)

  *10.18  Marketing Agreement, dated June 30, 1994, between NOVA Information
          Systems and Kessler Financial Services, L.P.(1), and Addendum to
          Marketing Agreement dated July 24, 1997, effective January 1, 1997,
          between NOVA Information Systems and Kessler Financial Services,
          L.P.(6)

  *10.19  Agreement Regarding Merchant Processing Services and Other Matters,
          dated May 5, 1995, among NOVA Information Systems, First Alabama Bank
          and Regions Financial Corp.(1)

  *10.20  Agreement dated June 3, 1992, as amended December 9, 1992, and
          November 2, 1994, between NOVA Information Systems and Mellon Bank,
          together with the Letter Agreement dated June 3, 1992, between NOVA
          Information Systems and Mellon Bank relating to fees, as amended
          December 10, 1992, and June 10, 1997(1), both as amended by Letter
          Agreement June 10, 1997(6)

   10.21  Depositary and Processing Agreement, dated September 30, 1993, between
          NOVA Information Systems and Bank of the West(1) 10.22 Merchant
          Business Purchase Agreement, dated October 18, 1994, as amended
          November 30, 1994, and December 9, 1994, among NOVA Information
          Systems, Inc., the Bank of Boulder, Bolder Bancorporation and NOVA
          Newco, Inc.(1)
       
   10.23  Marketing Agreement, dated October 1, 1992, between NOVA Information
          Systems and MBNA America Bank, N.A.(1)
       
   10.24  Agreement Not to Compete, dated October 1, 1992, between NOVA
          Information Systems and MBNA America Bank, N.A.(1)
       
   10.25  Depositary and Settlement Agreement, dated January 31, 1996, among the
          Registrant (formerly NOVA Holdings, Inc.), NOVA Information Systems
          and FUNB(1)
       
   10.26  Marketing Support Agreement, dated January 31, 1996, among the
          Registrant (formerly NOVA Holdings, Inc.), NOVA Information Systems
          and the First Union Banks(1)
       
   10.27  Merchant Asset Purchase Agreement, dated May 29, 1997, between NOVA
          Information Systems and Crestar Bank(4)
       
   10.28  Agreement Respecting a Limited Liability Company, dated October 7,
          1997, by and among NOVA Information Systems, Firstar Bank U.S.A., N.A.
          d/b/a Elan Financial Services and Firstar Bank Milwaukee, N.A.(5)

  *10.29  Agreement Respecting a Limited Liability Company, dated December 12,
          1997, by and among the Registrant, NOVA Information Systems and Key
          Bank National Association(6)

  *10.30  Merchant Asset Purchase Agreement, dated December 30, 1997, by and
          between NOVA Information Systems and MBNA American Bank, N.A.(6)

   10.31  Merchant Asset Purchase Agreement, dated October 8, 1998, among the
          Registrant, Core States Bank of Delaware, N.A., First Union National
          Bank and NOVA Information Systems, Inc. (12)
       
   10.32  Stock Option Agreement dated June 17, 1998, between the Registrant (as
          issuer) and PMT Services, Inc.

<PAGE>
  10.33   Stock Option Agreement dated June 17, 1998, between PMT Services, Inc.
          (as issuer) and the Registrant

  10.34   Employment Agreement, dated June 17, 1998, by and between Richardson
          M. Roberts and the Registrant(8)

  10.35   Employment Agreement, dated June 17, 1998, by and between Gregory S.
          Daily and the Registrant(8)

  10.36   Employment Agreement, dated July 31, 1998, effective March 1, 1998,
          between the Registrant and Rebecca L. Powell(11)

  10.37   Employment Agreement, dated July 31, 1998, effective March 1, 1998
          between the Registrant and Pamela A. Joseph(11)

  10.38   Employment Agreement, dated July 31, 1998, effective March 31, 1998,
          between the Registrant and John Perry(11)

  10.39   Employment Agreement, dated October 27, 1995, effective January 31,
          1996, between NOVA Information Systems and Edward Grzedzinski(1)

  10.40   Employment Agreement, dated October 27, 1995, effective January 31, 
          1996, between NOVA Information Systems and James M. Bahin(1)

  13.1    Consolidated Financial Statements**

  21      Subsidiaries of the Registrant
         
  23.1    Consent of Ernst & Young LLP.**

  23.2    Consent of PricewaterhouseCoopers LLP relating to the audited
          financial statements of PMT Services, Inc.**
          
  24      Powers of Attorney (included on the signature page of this Annual
          Report on Form 10-K/A, as amended).
         
  27      Financial Data Schedule
------
*    Confidential treatment pursuant to 17 CFR ((S)(S)) 200.80 and 230.406 has
been requested regarding certain portions of the indicated Exhibit, which
portions have been filed separately with the Commission.

**   Filed herewith.

(1)  Filed as an exhibit to the Company's Registration Statement on Form S-1
     (Registration No. 333-3287), and incorporated herein by reference.

(2)  Filed as an exhibit to the Company's Annual Report on Form 10-K for the
     fiscal year ended December 31, 1996, Commission File No. 1-14342, and
     incorporated herein by reference.

(3)  Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     quarter ended March 31, 1996,  Commission File No. 1-14342, and
     incorporated herein by reference.

(4)  Filed as an exhibit to the Company's Current Report on Form 8-K, Commission
     File No. 1-14342, and incorporated herein by reference.

<PAGE>
(5)  Filed as an exhibit to the Company's Current Report on Form 8-K, Commission
     File No. 1-14342, and incorporated herein by reference.

(6)  Filed as an exhibit to the Company's Annual Report on Form 10-K for the
     fiscal year ended December 31, 1997, Commission File No. 1-14342, and
     incorporated herein by reference.

(7)  Filed as an exhibit to the Company's Registration Statement on Form S-1
     (Registration No. 333-45997), and incorporated herein by reference.

(8)  Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     quarter ended June 30, 1998, Commission file No. 1-14342, and incorporated
     herein by reference.

(9)  Filed as an exhibit to the Company's Registration Statement on Form S-8
     (Registration No. 333-64681), and incorporated herein by reference.

(10) Filed as an exhibit to the Company's Registration Statement on Form S-8
     (Registration No. 333-64683), and incorporated herein by reference.

(11) Filed as an exhibit to the Company's Registration Statement on Form S-4
     (Registration No. 333-61867), and incorporated herein by reference.

(12) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     quarter ended September 30, 1998, Commission file No. 1-14342, and
     incorporated herein by reference.

    
(B)  REPORTS ON FORM 8-K

     Report on Form 8-K/A filed on December 12, 1998, Commission file number 1-
     14342 in connection with the PMT Merger (financial statements included).

     Report on Form 8-K filed on October 9, 1998, Commission file number 1-14342
     in connection with the PMT Merger.

(C)  EXHIBITS

     All exhibits required by Item 601 of Regulation S-K are incorporated herein
     by reference or are filed herewith.      


<PAGE>
 
     NOVA CORPORATION
     INDEX TO EXHIBIT 13 - FINANCIAL STATEMENTS
     COVERED BY REPORT OF INDEPENDENT AUDITORS
    
<TABLE> 
<CAPTION> 
     <S>                                                                   <C> 
     (Item 14(a))                                                          Page Number

       Consolidated Financial Statements:                                     
                                                                              
       Report of Ernst & Young LLP Independent Auditors                            1       
                                                                                    
       Report of Pricewaterhouse Coopers LLP Independent Auditors                  2
                                                                                    
       Consolidated Balance Sheets at December 31, 1998 and 1997.                  3
                                                                                    
       Consolidated Statements of Operations for the years ended                    
          December 31, 1998, and 1997, and 1996.                                   4
                                                                              
       Consolidated Statements of Shareholders' Equity for the years ended    
          December 31, 1998, and 1997, and 1996.                                   5
 
       Consolidated Statements of Cash Flows for the years ended
          December 31, 1998, and 1997, and 1996.                                   6
 
       Notes to Consolidated Financial Statements                               7-28
 
  2.   Financial Statement Schedules
 
       The following consolidated financial statement schedule of NOVA is included in Item 14(d):
 
          Schedule II Valuation and Qualifying Accounts                           29
 </TABLE>
     
All other schedules not included above have been omitted because they are not
applicable, not material, or the required information is given in the financial
statements or notes thereto.

                                      42