<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1998

                                       OR

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

        For the transition period from _________ to ___________

                         COMMISSION FILE NUMBER 0-10966

                       NATIONAL TRANSACTION NETWORK, INC.
                       ----------------------------------
             (Exact name of registrant as specified in its charter)

               Delaware                                 No. 75-1535237
               --------                                 --------------
   (State or other jurisdiction                        (I.R.S. Employer
   of incorporation or organization)                 Identification Number)


                 117 Flanders Road
             Westborough, Massachusetts                            01581
             --------------------------                            -----
       (Address of principal executive offices)                 (Zip Code)

                                 (508) 870-3200
                                 --------------
              (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
                                                ---             ---

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: Common Stock, $.15
par value per share, outstanding as of November 9, 1998: 3,325,468 shares.



<PAGE>   2



                       NATIONAL TRANSACTION NETWORK, INC.



<TABLE>
<CAPTION>
                                                                               PAGE
                                                                               ----

PART I     FINANCIAL INFORMATION

     <S>          <C>                                                          <C>
     Item 1       Financial Statements

                  Balance Sheets
                     September 30, 1998 and December 31, 1997                    3

                  Statements of Operations
                     Three months ended September 30, 1998 and 1997              5
                     Nine months ended September 30, 1998 and 1997               6

                  Statements of Cash Flows
                     Nine months ended September 30, 1998 and 1997               7

                  Notes to Financial Statements                                  8

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


PART II    OTHER INFORMATION                                                    14


SIGNATURES                                                                      15

</TABLE>


                                       2



<PAGE>   3

                          PART I - FINANCIAL STATEMENTS


ITEM I. FINANCIAL STATEMENTS
---------------------------------------------------

                       NATIONAL TRANSACTION NETWORK, INC.
                                 BALANCE SHEETS


                                     ASSETS
                             ----------------------

<TABLE>
<CAPTION>
                                                                         (Unaudited)
                                                                        September 30,           December 31,
                                                                            1998                    1997
                                                                         ----------              ----------
<S>                                                                      <C>                     <C>     
           CURRENT ASSETS:
              Cash and equivalents                                         $304,753                $457,857
              Accounts receivable
              (Net of allowance for doubtful accounts
               of $40,000 at September 30, 1998
               and December 31, 1997)                                       631,468                 785,597
              Inventory                                                     164,458                 754,919
              Prepaid expenses                                               39,905                  50,482
                                                                         ----------              ----------
                TOTAL CURRENT ASSETS                                      1,140,584               2,048,855
                                                                         ----------              ----------

           PROPERTY AND EQUIPMENT                                           912,408               1,002,003
              Less accumulated depreciation
               and amortization                                            (768,366)               (712,981)
                                                                         ----------              ----------
                PROPERTY AND
                EQUIPMENT - NET                                             144,042                 289,022
                                                                         ----------              ----------

           OTHER ASSETS
             Capitalized software development costs                          43,120                 286,228
              Purchased technology, net                                     271,603                    -
              Deposits and other                                             16,363                  14,663
                                                                         ----------              ----------
                 Total other assets                                         331,086                 300,891
                                                                         ----------              ----------
                               TOTAL                                     $1,615,712              $2,638,768
                                                                         ==========              ==========
</TABLE>



           See Notes to Financial Statements.






                                       3


<PAGE>   4

                       NATIONAL TRANSACTION NETWORK, INC.
                                 BALANCE SHEETS



                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
                -------------------------------------------------

<TABLE>
<CAPTION>
                                                                        (Unaudited)
                                                                        September 30,           December 31,
                                                                            1998                   1997
                                                                         ----------              ----------
<S>                                                                        <C>                     <C>     
           CURRENT LIABILITIES:
              Accounts payable                                             $130,135                $265,708
              Accounts payable-stockholder                                  271,981                 318,858
              Accrued liabilities                                           552,649                 223,457
              Deferred revenue                                              280,720                  49,067
              Short term portion of capital lease                             3,997                  36,598
                                                                         ----------              ----------
                TOTAL CURRENT LIABILITIES                                 1,239,482                 893,688
                                                                         ----------              ----------

           LONG TERM LIABILITIES:
              Long term portion of capital lease                               -                     24,384
             Convertible notes payable to stockholder                     1,642,687               1,524,208
                                                                         ----------              ----------
                TOTAL LONG TERM LIABILITIES                               1,642,687               1,548,592
                                                                         ----------              ----------

           STOCKHOLDERS' EQUITY (DEFICIENCY):
              Preferred stock, $.10 par value;
               authorized, 5,000,000 shares;
               none issued and outstanding
              Common stock, $.15 par value;
               authorized, 20,000,000 shares;
               issued and outstanding, 3,325,438
               and  3,248,606 shares at Sept. 30, 1998
               and December 31, 1997, respectively                          498,827                 490,974
              Additional paid-in capital                                 12,609,215              12,596,573
              Accumulated deficit                                       (14,374,499)            (12,891,059)
                                                                         ----------              ----------
                TOTAL STOCKHOLDERS'
                   EQUITY (DEFICIENCY)                                   (1,266,457)                196,488
                                                                         ----------              ----------
                             TOTAL                                       $1,615,712              $2,638,768
                                                                         ==========              ==========

</TABLE>
           See Notes to Financial Statements.



                                       4

<PAGE>   5


                       NATIONAL TRANSACTION NETWORK, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                                 Three Months Ended
                                                                                    September 30,
                                                                         ----------------------------------
                                                                            1998                    1997
                                                                         ----------              ----------
<S>                                                                      <C>                     <C>     
        REVENUE:
           Systems and equipment                                           $858,830                $795,117
           Software and services                                            518,195                 603,030
                                                                         ----------              ----------
             Total                                                        1,377,025               1,398,147
                                                                         ----------              ----------
        COST AND EXPENSES:
           Cost of revenue                                                  917,944                 855,142
           Research and development                                         286,477                 201,452
           Selling, general and administrative                              446,119                 412,787
            Impairment of capitalized software asset                        669,919                    -
                                                                         ----------              ----------
             Total                                                        2,320,459               1,469,381
                                                                         ----------              ----------
        LOSS FROM OPERATIONS                                               (943,434)                (71,234)
                                                                         ----------              ----------
        OTHER INCOME (EXPENSE):
           Interest income                                                       34                      22
           Interest expense                                                 (39,569)                 (7,441)
                                                                         ----------              ----------
             Total                                                          (39,535)                 (7,419)
                                                                         ----------              ----------
               NET LOSS                                                   ($982,969)               ($78,653)
                                                                         ==========              ==========

        BASIC AND DILUTED NET
        LOSS PER COMMON SHARE                                                ($0.30)                 ($0.02)
                                                                         ==========              ==========


        WEIGHTED AVERAGE NUMBER OF
         COMMON SHARES OUTSTANDING                                        3,325,438               3,250,671
                                                                         ==========              ==========

</TABLE>


        See Notes to Financial Statements.


                                       5

<PAGE>   6


                       NATIONAL TRANSACTION NETWORK, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                                Nine Months Ended
                                                                                   September 30,
                                                                         ----------------------------------
                                                                            1998                    1997
                                                                         ----------              ----------
<S>                                                                      <C>                     <C>       
        REVENUE:
           Systems and equipment                                         $2,214,307              $1,759,457
           Software and services                                          1,832,199               1,801,256
                                                                         ----------              ----------
             Total                                                        4,046,506               3,560,713
                                                                         ----------              ----------
        COST AND EXPENSES:
           Cost of revenue                                                2,469,163               1,941,621
           Research and development                                         799,572                 722,336
           Selling, general and administrative                            1,470,927               1,339,740
            Impairment of capitalized software asset                        669,919                    -
                                                                         ----------              ----------
             Total                                                        5,409,581               4,003,697
                                                                         ----------              ----------
        LOSS FROM OPERATIONS                                             (1,363,075)               (442,984)
                                                                         ----------              ----------
        OTHER INCOME (EXPENSE):
           Interest income                                                      100                   1,801
           Interest expense                                                (120,465)                (12,034)
                                                                         ----------              ----------
             Total                                                         (120,365)                (10,233)
                                                                         ----------              ----------
               NET LOSS                                                 ($1,483,440)              ($453,217)
                                                                         ==========              ==========

        BASIC AND DILUTED NET
        LOSS  PER COMMON SHARE                                               ($0.45)                 ($0.14)
                                                                         ==========              ==========


        WEIGHTED AVERAGE NUMBER OF
         COMMON SHARES OUTSTANDING                                        3,308,107               3,249,302
                                                                         ==========              ==========

</TABLE>


        See Notes to Financial Statements.


                                       6



<PAGE>   7

                       NATIONAL TRANSACTION NETWORK, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 Nine Months Ended
                                                                                   September 30,
                                                                         ----------------------------------
                                                                            1998                    1997
                                                                         ----------              ----------
<S>                                                                     <C>                      <C>       
       Cash Flows From Operating Activities:
       Net loss                                                         ($1,483,440)              ($453,217)
                                                                         ----------              ----------
       Adjustments to reconcile net loss to
          net cash provided by (used for) operating activities:
          Depreciation and amortization                                     121,164                  95,545
          Interest on conv. subordinated note payable to stockholder        118,479                    -
          Loss on sale of property and equipment                             13,905                    -
          Impairment of capitalized software development costs              669,919                    -

       Increase (decrease) in cash from:                      

          Accounts receivable                                               154,129                 314,054
          Inventory                                                         590,461                (865,573)
          Prepaid expenses                                                   10,577                  (2,634)
          Other assets                                                       (1,700)                 (2,732)
          Accounts payable-stockholder                                      (46,877)                984,647
          Accounts payable and accrued
            liabilities                                                     236,119                 (40,496)
          Deferred revenue                                                  231,653                (327,554)
                                                                         ----------              ----------
       Total adjustments                                                  2,097,829                 155,267
                                                                         ----------              ----------
       Net cash provided by (used for) operating activities                 614,389                (297,950)            
                                                                         ----------              ----------
       Cash Flows From Investing Activities:
          Purchases of property and equipment                               (47,379)                (87,406)
          Proceeds from the sale of equipment                                11,898                    -
          Acquisition of purchased technology                              (313,555)                   -
          Capitalization of software development costs                     (426,811)               (127,478)
                                                                         ----------              ----------
       Net cash used for investing activities                              (775,847)               (214,884)
                                                                         ----------              ----------
       Cash Flows From Financing Activities:

         Proceeds from stock issued under stock option plan                  20,495                   4,350
         Proceed from issuance of convertible subordinated debt                                     400,000
         Proceeds from bank line of credit                                  100,000                 400,000
         Repayment to bank line of credit                                  (100,000)               (400,000)
         Repayment of capital lease                                         (12,141)                (13,642)
                                                                         ----------              ----------
       Net cash provided by financing
          activities                                                          8,354                 390,708
                                                                         ----------              ----------
       Net decrease in cash and equivalents                                (153,104)               (122,126)

       Cash and Equivalents, Beginning of Period                            457,857                 266,045
                                                                         ----------              ----------
       Cash and Equivalents, End of Period                                 $304,753                $143,919
                                                                         ==========              ==========
       Supplemental Information:
       Cash Paid for Interest                                                $1,986                 $10,751
                                                                         ----------              ----------
       Non-Cash Transactions:
       Transfer of Capital Lease in conjunction
           with the sale of software license                                $44,844                    -

       Return of purchased software                                         $42,500                    -

       Capital lease additions                                                 -                    $63,389


</TABLE>

       See Notes to the Financial Statements




                                       7

<PAGE>   8


                       NATIONAL TRANSACTION NETWORK, INC.
                          NOTES TO FINANCIAL STATEMENTS


1.       The accompanying financial statements and notes do not include all of
         the disclosures made in National Transaction Network, Inc.'s ("NTN" or
         the "Company") Form 10-K for the year ended December 31, 1997 which
         should be read in conjunction with these statements. In the opinion of
         the Company, the financial statements include all adjustments necessary
         for a fair presentation of the interim results.

         In June 1998, International Verifact Inc., the Company's parent
         company, and Checkmate Electronics, Inc. merged to form IVI Checkmate
         Corp.("IVI Checkmate"), the third largest electronic payment solutions
         provider in North America. IVI Checkmate acquired Plourde Computing
         Services, Inc. ("Plourde"), an independent software vendor, on
         September 29, 1998.

2.       The results of operations for the nine month period ended September 30,
         1998 are not necessarily indicative of the results to be expected for
         the full year.

3.       In October 1997, the Accounting Standards Executive Committee issued
         Statement of Position ("SOP") 97-2, "Software Revenue Recognition." SOP
         97-2 provides guidance on when revenue should be recognized and in what
         amounts for licensing, selling, leasing, or other marketing computer
         software. SOP 97-2 supersedes SOP 91-1, "Software Revenue Recognition,"
         and was adopted by the Company for transactions entered into after
         December 31, 1997. Adoption of SOP 97-2 did not have a material effect
         on the Company's revenue recognition.

4.       The Company adopted the provisions of Statement of Financial Accounting
         Standards No. 128, "Earning per Share," and has restated all periods
         presented to conform with the new presentation. Basic net loss per
         common share is computed using the weighted average number of common
         shares outstanding during each period. In determining the denominator
         for dilutive loss per common share, no shares resulting from the
         assumed exercise of options using the treasury stock method or
         resulting from the conversion of the convertible subordinated notes
         payable to stockholder are added to the denominator because the
         inclusion of such shares would be antidilutive due to the net loss for
         each of the periods presented. Accordingly, diluted loss per common
         share is equal to basic loss per common share and is not separately
         disclosed.

5.       For the quarters ended September 30, 1998 and 1997, the Company made
         inventory purchases from IVI Checkmate totaling approximately $260,000
         and $1,300,000 respectively. Accrued interest for the Company's
         Convertible Subordinated Notes Payable to IVI Checkmate totaled $39,292
         and $118,479 for the quarter and nine months ended September 30, 1998.


                                       8


<PAGE>   9

6.       In January 1998, the Company purchased certain intellectual property,
         related software maintenance contracts and tangible assets used to
         support such contracts. The purchase price is based on 75% of the
         revenues derived from the software maintenance contracts for the twelve
         month period following the date of purchase. This purchase price is
         estimated to be approximately $316,000 and is payable 30 days from the
         receipt of the applicable software maintenance revenue. The final
         allocation of the purchase price is contingent on this revenue and the
         purchase price will be adjusted when the underlying revenues are known.

7.       The Company's working capital line of credit with its bank which was to
         expire on January 4, 1999 has been terminated without penalty. Future
         working capital advances will be provided by IVI Checkmate.

8.       The Company accounts for certain software development costs in
         accordance with Statement of Financial Accounting Standards (SFAS) No.
         86, "Accounting for the Costs of Computer Software to be Sold, Leased,
         or Otherwise Marketed." It is the Company's policy to capitalize costs
         relating to the development of its products once technological
         feasibility has been achieved until the products are available for
         general release to customers, provided that the recoverability of such
         costs is reasonably assured through expected sales revenue less related
         selling expenses. Upon availability of products for general release to
         customers, all related capitalized development costs are amortized over
         a suitable period based on the products' estimated economic life. Due
         to IVI Checkmate's acquisition of Plourde, management has determined
         that the costs capitalized for the PINnacle NT product, totaling
         $669,919, are not recoverable and therefore impaired. Accordingly,
         these costs were written off in the current period. The Company is
         continuing to capitalize costs for its Mainsail product, which totaled
         $43,120 at September 30, 1998.

9.       On October 26, 1998, the Company issued a Convertible Subordinated Note
         to IVI Checkmate in the amount of $200,000 according to the terms of
         the August 18, 1997 Convertible Subordinated Note Purchase Agreement.


                                       9

<PAGE>   10




Item 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              -------------------------------------------------
              CONDITION AND RESULTS OF OPERATIONS
              -----------------------------------

     The Company's business strategy focuses on development and marketing of
software products and professional services designed to address the electronic
payment system needs of multi-lane retailers. In keeping with this strategy, the
Company has purchased and sold technology in a effort to maximize its
opportunities in the market place.

     In January 1998, the Company purchased the rights to certain software
products from BancTec USA, Inc. ("BancTec"). Also included in the purchase were
certain customer software maintenance contracts and tangible assets used to
support such contracts. The software products acquired by the Company complement
it's existing software products and services. The Mainsail software product
acquired from BancTec enables retailers to centralize processing of their check
and EFT transactions reducing the retailers' costs of handling electronic
payments by reducing their reliance on costly third party transaction
processors.

In June 1998,  International  Verifact Inc., the Company's  parent company,  and
Checkmate   Electronics,   Inc.  merged  to  form  IVI  Checkmate  Corp.   ("IVI
Checkmate"),  the third largest  electronic  payment solutions provider in North
America. IVI Checkmate acquired Plourde Computing Services, Inc. ("Plourde"), an
independent  software vendor, on September 29, 1998.  Plourde's flagship product
is a  Windows/NT  based  application  which has been  installed  and has reached
market acceptance.

Results of Operations
---------------------

     Revenue for the quarter ended September 30, 1998 decreased by 1.5% to
$1,377,025 compared to $1,398,147 for the quarter ended September 30, 1997. The
decrease in revenue was the result of decreased software and services sales
between quarters. For the nine months ended September 30, 1998, revenue
increased by 13.6% to $4,046,506 compared to $3,560,713 for the nine months
ended September 30, 1997. The increase in revenue was primarily due to one
customer's decision to replace its lane equipment in several divisions in the
first three quarters of 1998. This customer accounted for 62.4% of revenue in
the first nine months of 1998 versus 46.9% during the same period in 1997. In
addition, maintenance revenue increased as a result of the acquisition of the
Mainsail product line.

     Gross margins as a percent of revenue were 33.3% and 39.0%, respectively,
for the quarter and nine months ended September 30, 1998 compared to 38.8% and
45.5%, for the quarter and nine months ended September 30, 1997. The decreases
in gross margin percentages were primarily due to a shift in mix between
hardware, software, and professional services revenue. Lower margin hardware
revenue accounted for


                                       10

<PAGE>   11

approximately 62% and 55%, respectively, of total revenue for the quarter and
nine months ended September 30, 1998 compared to approximately 57% and 49%,
respectively, for the quarter and nine months ended September 30, 1997.

     Total operating expenses for the quarter and nine months ended September
30, 1998 increased by 128.3% and 42.6%, respectively, compared to the quarter
and nine months ended September 30, 1997. The significant component of the
increase in operating expense was the impairment of the capitalized software
development costs of the PINnacle NT product. Management has determined that the
costs capitalized for the PINnacle NT product, totaling approximately $670,000,
are not recoverable as the software was made redundant by the acquisition of
Plourde by IVI Checkmate. Accordingly, the Company will be redirecting its
marketing and development resources toward the NT platform product, developed by
Plourde mentioned above, as part of its complete payment solution with the
Mainsail switch. The Company is continuing to capitalize costs for Mainsail
development and those costs were $32,340and $43,120 for the quarter and nine
months ended September 30, 1998.

     Research and development expenses totaled $286,477 for the quarter ended
September 30, 1998 compared to $201,452, for the quarter ended September 30,
1997. For the nine months ended September 30, 1998, research and development
expenses increased by 10.7% to $799,572 compared to $722,336 for the nine months
ended September 30, 1997. Increases in outside consulting expenses due to the
utilization of contract software development engineers and quality assurance
engineers and compensation and fringe benefit expense related to additional
research and development staff were primarily responsible for the increases in
research and development expenses for the quarter and nine months ended
September 30, 1998 compared to the quarter and nine months ended September 30,
1997.

     Selling, general and administrative expenses increased by 8.1% to $446,119
for the quarter ended September 30, 1998 compared to $412,787 for the quarter
ended September 30, 1997. For the nine months ended September 30, 1998, selling,
general and administrative expenses increased by 9.8% to $1,470,927 compared to
$1,339,740 for the nine months ended September 30, 1997. For both the quarter
and nine months ended September 30, 1998, the increases in selling, general and
administrative expenses were due primarily to the addition of staff positions
necessitated by the acquisition of the Mainsail product from BancTec and higher
sales travel.

     The decrease in interest income for the nine months ended September 30,
1998 compared to the nine months ended September 30, 1997 was due to a decrease
in the amount of funds available for investment. The increase in interest
expense for the quarter and nine months ended September 30, 1998 was primarily
due to the issuance of convertible notes payable to International Verifact Inc.,
now IVI Checkmate, during the third and fourth quarters of 1997.


                                       11



<PAGE>   12

Liquidity and Capital Resources
-------------------------------

     Cash balances at September 30, 1998 were $304,753 compared to $457,857 at
December 31, 1997. Net cash provided by operating activities was $614,389 for
the nine months ended September 30, 1998. The adjustment resulting from the
impairment of capitalized software development costs, decreases in inventory and
account receivables coupled with increases in accrued liabilities and deferred
revenue partially offset by the net loss from operations, accounted for the cash
provided by operations during the period. Net cash used in investing activities
for the nine months ended September 30, 1998 totaled $775,847 and represented
the capitalization of certain software development costs which were discussed
above and the purchase of technology from BancTec.

     Management believes that sources of liquidity for future needs can be
generated from existing cash balances, cash generated from operations, and
borrowings available to the Company under its Convertible Subordinated Note
Agreement with IVI Checkmate.

Year 2000 Readiness Disclosure Statements
-----------------------------------------

     The latest versions of the Company' PINnacle software products are designed
to be "Year 2000 Compliant." The Company defines "Year 2000 Compliant" as the
software product's ability to accurately process date and time data (including
calculating, comparing, and sequencing) from, into, and between the years 1999
and 2000 and later, including calculating date and time data for leap years. In
addition, a software product that is Year 2000 Compliant, when used in
combination with other software, hardware or firmware, will accurately process
date and time data if such other software, hardware or firmware properly
exchanges date and time data with it. While the software has been tested, there
can be no assurance, however, that the Company's software products that are
designed to be Year 2000 Compliant contain all the necessary code changes and
modifications to be compliant with all possible Year 2000 issues.

     While the Company's Mainsail product was designed to be Year 2000
Compliant, the operating systems that are used to compile the product in several
customer locations are not compliant. The Company is currently working to port
the product onto several Year 2000 Compliant operating system platforms. Testing
of one release began in October, 1998 and compilation on other platforms is
scheduled for completion by December 31, 1998. This entire project is expected
to be completed no later than the second quarter of 1999.

      The Company has undertaken various initiatives to ensure that its computer
hardware and certain computer software programs in its internal operations,
including applications used in product development, services, financial,
administrative and business systems will function into and beyond the Year 2000.
The Company has received responses from the majority of its vendors representing
Year 2000 Compliance and is continuing to assess the areas within its business
and operations which could be adversely affected by Year 2000




                                       12
<PAGE>   13

issues and evaluating the costs which may be associated with modifying and
testing its systems for Year 2000 compliance. Although the Company is not yet
able to estimate any incremental cost for Year 2000 issues, based on its
preliminary review to date, management believes that all material systems will
be compliant by the Year 2000 and that the cost to address the issues is not
material. The Company believes that any Year 2000 issues relating to internal
systems will not have a material adverse effect on its business, financial
condition or results of operations.

     As part of the Year 2000 assessment, the Company is reviewing its
relationships with certain key outside vendors and others with whom it has
significant business relationships. Although a comprehensive analysis has not
yet been completed, the Company is not presently aware of any exposure which
would have a material adverse effect arising from potential third party
failures. However, there can be no assurances that the failure of any such
material third party to be Year 2000 compliant would not have a material adverse
effect on the Company's results of operation.

     A contingency plan has not been developed for dealing with the most
reasonably likely worst case scenario and such scenario has not yet been clearly
defined. However, the Company plans to develop a contingency plan by June 1999.
The Company cannot guarantee that its efforts will prevent all consequences and
there may be undetermined future costs due to business disruption that may be
caused by customers, suppliers or unforeseen circumstances.


                                       13
<PAGE>   14


PART II - OTHER INFORMATION

Item 1.       Legal Proceedings.
              ------------------

              The Company has no material legal proceedings at this time.


Item 2.       Changes in Securities and Use of Proceeds.
              ------------------------------------------

              Not applicable.


Item 3.       Defaults upon Senior Securities.
              --------------------------------

              Not applicable.


Item 4.       Submission of Matters to a Vote of Security Holders
              ---------------------------------------------------

              There were not matters submitted to a vote of the security holders
in the quarter ended September 30, 1998.

Item 5.       Other Information.
              ------------------

              Not applicable.

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

              (a)  Exhibits.
                   ---------

                  27.  Financial Data Schedule

              (b) Reports on Form 8-K.
                  --------------------

                  None


                                       14

<PAGE>   15

                                   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.



                                         NATIONAL TRANSACTION NETWORK, INC.





DATE:  November 12, 1998                 By   /s/Gregory A. Lewis
                                            ---------------------------
                                                Gregory A. Lewis, President and
                                                Chief Operating Officer
                                                (Principal Executive Officer)






DATE: November 12, 1998                  By_   /s/John J. Neubert
                                           -------------------------------
                                                John J. Neubert, Executive
                                                Vice President and Chief
                                                Financial Officer
                                                (Principal Financial and
                                                Accounting Officer)