A flock of Internet banks has risen up, offering above-market interest rates on deposits and easy transfers among accounts, as well as access to automated teller machines for cash. Traditional banks, too, are scrambling to expand their online services and, in the process, jettisoning worries that cyberspace will render their brick-and-mortar offices useless.

According to a recent report by Goldman Sachs & Co., from 3 per cent to 4 per cent of US households now use online banking. That's a far cry from the 30-35 per cent of retail securities trades conducted online, but analysts predict that cyberbanking will begin to catch up, growing to 20 per cent in two to three years.

They say the top selling points are the ease of moving funds and paying billselectronically, as well as the ability of customers to check on accounts at any time of the day with a few keystrokes.

Drawbacks include consumers' concerns about Internet privacy and security, as well as the requirements that users have a computer and Internet access.Signing up for cyberbanking is fairly easy at the Websites of banks that consider themselves pure Internet banks, such as Net.Bank Inc. of Atlanta (www.netbank.com), Telebank of Arlington (www.telebank. com) or Security First Network Bank of Atlanta (www.sfnb.com).

But a traditional brick-and-mortar bank makes signing up more complicated at its site.

Also, the pure Internet banks are eager to build a deposit base, so they offer above-market interest rates. And although the Internet banks don't have their own ATMs, they offer their customers access to national systems such as Cirrus and Honor.

Internet banking so far has been most popular with affluent, well-educated consumers, though as a group, they remain slightly less affluent andwell-educated than customers who invest online, according to the Goldman Sachs report.

Online bank customers have median household incomes of $63,860, compared with online securities investors, who have median incomes of $78,460, according to the report.

Deadlock over e-commerce talks

The issue of electronic commerce between the European Union and the United States is passing through a period of uncertainty. The trade negotiators were unable to break their lingering stalemate over data privacy issues once again.

The Clinton administration's trade representative, David Aaron, and the European Union's director general for financial services, John Mogg, met recently in Brussels. But as the two had predicted earlier, they were unable to resolve key differences over whether the administration's proposal for letting businesses regulate their own privacy practices are sufficient to meet a tough EU privacy directive that went into effect last year. The goal of intense negotiations over the past sixmonths has been to reach a compromise between the two widely different approaches before President Clinton's June 21 summit with the European officials.

``At this stage, both Mogg and Aaron don't know whether it will be possible to conclude the dialogue in time for the summit,'' Gerard De Graf, the EU's first secretary for trade in Washington, said.

``They made progress, but they were not able to resolve some of the outstanding differences and that was the object of the meeting. So there are important differences that remain.''

The key sticking points have been whether or not the administration's self-regulatory model ensures adequate enforcement of principles to protect consumer privacy and whether or not European consumers would have adequate access to the data companies collect about them.

The lack of an accord could result in a halt of electronic commerce between companies in the United States and Europe. There is always the possibility that data flows will be disrupted, said an official, addingthat the lack of predictability may actually be the worst thing for businesses to cope with.

ATM swallows cards

In a bizarre incident, an Australian bank's automated teller machines swallowed the cards of a large number of customers who tried to use the ATMs recently, Australian news media reported.

Officials at St. George Bank cited unspecified expiration-date problems that arose when the institution switched to a new computer system called Hogan. The bank's customer-service centre was flooded with calls of complaint; bank officials said they later fixed the problem.