It is cached to disk on the mainframe in Parker Hall, then to a tape.
Robots switch tapes.
Security Files are not encrypted as they go across the net. But if you use compression they will not be in plain text. How to turn on compression - if installed from snoopy this should already be turned on. This is the case with any backup system. Old files that show up as no longer being on your pc after your last backup will be deleted in a few weeks.