If email encryption is not feasible, adequate security may be achieved by using a tool such as WinZip or WinRAR to compress and encrypt the sensitive material. The zip file can then be sent as an email attachment. You would, however, need each recipient to agree to one-time (single-use) passwords to encrypt and decrypt the file to ensure each transmission was properly secure. For maximum protection, the passwords would have to be exchanged via another medium, such as the telephone.
If the files are too large to be sent as an email attachment, you can always use a third-party file exchange service such as YouSendIt, but be sure to encrypt the data using one of the tools mentioned above before sending it.
If you need to exchange a large number of files with each recipient on a regular basis, you will probably find emailing files one by one far too onerous. In this situation you may want to consider using a secure FTP server or even a site-to-site VPN connection. So long as you set up each business partner's access correctly, this can provide a convenient drop-box style method for exchanging hundreds or thousands of files without exposing them to a third party.
This was first published in September 2010