Interac attempts to allay security concerns as follows:
“The sender’s financial institution and the recipient's financial institution transfer funds using established and secure banking procedures. Personal or financial information, such as address, phone number and bank account information, is not shared and remains private.”So the sender doesn’t need to know the banking details of the receiver, and the money is actually transferred using traditional secure banking procedures. This seems to close the door on any problems, but there is one potential security hole.
When we pay bills online, we choose one of our accounts as the source of the money and some institution’s account to receive the money. With e-Transfer, you choose an account as a source of the funds, but the receiver gets to choose the destination account. For security, the sender chooses an answer to a personal security question such as “what is your favourite city?” and the receiver must enter the correct answer. The procedure is explained nicely in pictures on the Interac web site.
So, if someone else intercepts the email and can guess the answer to the security question, this person could receive the money. I don’t see this as a big threat for modest sums, but I'd be concerned about sending large sums of money this way. I did not investigate the fees that are charged for this type of transaction.