Security Experts:

PayPal Mobile Apps Plagued by Authentication Flaw: Researcher

An unpatched vulnerability affecting PayPal’s mobile applications can be exploited to access restricted accounts and even bypass the two-factor authentication (2FA) mechanism, a researcher claims.

PayPal can ask users to confirm their identity for fraud protection and due to regulatory obligations. When users are asked to verify their identity, they are blocked from accessing their account and instructed to call or email PayPal to complete the process.

However, according to Benjamin Kunz Mejri, the founder and CEO of Vulnerability Lab, restricted accounts can still be accessed via the PayPal mobile apps for Android and iOS. The researcher says the applications are plagued by a vulnerability that can be exploited to access such accounts through repeated login attempts that leverage valid session cookies.

“My account is blocked to login to the website or to login without a valid cookie. When an error in the valid cookie occurs, there is a redirect. This redirect [leads to] a fail in the security approval procedure and results finally in the bypass of the auth and protection mechanism,” Kunz Mejri told SecurityWeek.

The bug bounty hunter says the method can be used to bypass not only the identity verification mechanism, but also the 2FA system. Once the account is accessed, its password and other profile details can be changed, the expert noted.

The issue was reported to PayPal in April, but it remains unfixed. According to Vulnerability Lab, the company confirmed the existence of the flaw, but downplayed its impact.

PayPal told Vulnerability Lab that this is a low risk flaw because the identity approval mechanism cannot be continually bypassed. And even when it can be bypassed, it’s only a one-time bypass, PayPal reportedly said.

Vulnerability Lab, which published an advisory detailing the issue and a PoC video, disagrees with the impact rating, arguing that they have been able to reproduce the exploit each time.

"We received Vulnerability Lab’s bug submission and attempted to reproduce the issue with the details provided. With the information given to us, we were unable to reproduce the claimed issue. We are working with Vulnerability Labs, and other security researchers, to keep our customers secure. We have no evidence to suggest that any PayPal accounts were impacted in any way. PayPal takes the security of our customers’ data, money and account information extremely seriously," PayPal told SecurityWeek.

This is not the first time PayPal and Vulnerability Lab have argued over the impact of a mobile API flaw. In October 2014, the German security firm publicly disclosed a similar security bypass issue after PayPal refused to acknowledge its existence for more than a year. Ultimately, the payment processor confirmed the vulnerability, patched it, and promised to reward the researchers.

Bitdefender also reported identifying a PayPal vulnerability last week. The antivirus company discovered a persistent cross-site scripting (XSS) bug that could have been exploited to upload malicious files and launch attacks against Firefox users. PayPal addressed the issue found by Bitdefender.

*Updated with statement from PayPal

Related Reading: PayPal Patches Serious Flaw in Payment System

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Eduard Kovacs is an international correspondent for SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.