For as long as Internet zealots have been predicting the "killer app" that would coax everyone online, an equally noisy group has prophesied the cyberspace catastrophe: the breach or crash so cataclysmic that consumers - especially of financial services - would flee the Net en masse.

The killer app may not have materialized yet, but it may now finally be time to declare: Apocalypse never.

So much has happened in the last year to take the wind out of the Cassandras' sails. Negative events failed to gain traction in the public imagination. Simultaneously, a general understanding of the Internet's function and its limitations has taken hold. This has led to a steady growth in consumer confidence.

One CEO of an Internet bill payment service said his company used to call it the "ValuJet problem" - the specter of a colossal crash that would scare away droves of customers. The CEO, Edward G. McLaughlin of Paytrust Inc., said last week that he no longer worries about such an event.

"We're in too deep now," he said. "People couldn't do their jobs without e-mail," and this reality prompts them to trust the network in fundamental ways.

This trust is formidable in light of the events that could have shaken it. Back in January a hacker said he had stolen 300,000 customer credit card numbers from the CD Universe Web site and posted thousands of the numbers on another site after the music seller refused to pay him $100,000 in ransom. The thief's exploits made front-page news, and the headlines seemed calculated to stir up fear. But nobody lost their cool - and no consumers lost money.

Nor has pandemonium resulted from the countless crashes that have taken place at trading Web sites, like those run by Charles Schwab and E-Trade Group Inc. These have grown so numerous they scarcely earn column space in newspapers anymore, and while customers used to howl in outrage, they now merely chafe in impatience at being unable to access their accounts or to place trades for a few hours at a time. Neither Schwab's nor E-Trade's stock price has suffered as a result of the crashes, and there has been no consumer exodus.

And then there were the viruses - from Melissa to I Love You - that could have spoiled our faith in the Web. No matter how many times corporate employees were warned not to open the attachments that came with these files, some hapless innocents opened them anyway, crippling the servers attached to their workplaces. Even the venerable Ford Motor Co. decided to take its servers down temporarily to deal with the "I Love You" virus. But then life online - in Detroit and elsewhere - continued as usual.

Perhaps most important, the turn of the millennium came and went without incident. Talk about hysteria-inducing hype: There were rumors that automated teller machines would all stop working, fears that nobody would be able to get their money or make a credit card transaction. As it turned out, there were no runs on banks, and through it all - even as the hype built to a crescendo - the adoption of Internet-based financial services marched on.

"I think it's time the naysayers were put to rest," said Chuck Riegel, executive vice president of worldwide marketing at CyberCash Inc., the Internet payments service company. The volume of business being done on the Internet "has done nothing but increase, and it is accelerating," he said.

CyberCash, which sells Internet transaction software through banks and other resellers, saw the volume of transactions processed on its products increase 300% in 1999 over 1998, Mr. Riegel said. "We did almost 58 million transactions last year, and had 23,000 merchants online doing business," he said. "We're at a volume of activity where it's not going away. This is the first year we could have answered this way."

While executives at Internet companies are naturally eager to declare the battle won, bankers may be too cautious a group to say their concerns have been put to rest. Most bank technologists no longer have night sweats about an Internet "War of the Worlds" scenario, but neither are they resting with complete ease. Several senior bankers said in interviews that they will never be able to risk glancing away from the task of network security - ever.

While Y2K passed smoothly, "I still think we should continue to have a major concern about our systems and the security, firewalls, and privacy of information," said Debra Rossi, executive vice president at Wells Fargo & Co., which has more Internet banking customers than any other U.S. bank. Ms. Rossi, a longtime senior manager of Wells Fargo's Internet efforts, took charge in January of the company's business Internet strategies.

Nonetheless, for bankers, calling a definitive halt to the Internet waiting game could have some important ramifications. It could hush the senior-level doubters who may surreptitiously be applying brakes to banks' Internet efforts. It could encourage banks to put more marketing muscle behind the message they need to convey to consumers: "Come on in! The water's fine."

Admittedly, the oceans have grown far more friendly for bank technologists as they try to get senior management to take a full plunge. Back in 1996, the common refrain at conferences about Internet banking was, "They just don't understand us." When speakers would describe innovative online programs they were testing, the inevitable question from the audience was, "How did you get your CEO to agree?"

If there is still a virtual landmine lurking in cyberspace, banking industry experts agreed, it is probably the issue of fraud. "Any large-scale, fraudulent bilking of online banking customers would not be catastrophic, but it would make people sit up and notice," said Theodore Iacobuzio, senior analyst at Tower Group, a technology consulting firm in Needham, Mass. "As far as everything coming to a grinding halt, that's not the way things have proven to happen in the real world.''

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