PayPal to pay security researchers for reported vulnerabilities

PayPal launches a paid bug-bounty program for responsible security researchers

Payment services provider PayPal will reward security researchers who discover vulnerabilities in its website with money, if they report their findings to the company in a responsible manner.

"I'm pleased to announce that we have updated our original bug reporting process into a paid 'bug bounty' program," PayPal's Chief Information Security Officer Michael Barrett said in a blog post on Thursday.

Cross-site scripting (XSS), cross-site request forgery (CSRF), SQL injection (SQLi) and authentication bypass vulnerabilities will qualify for bounties, the amount of which will be decided by the PayPal security team on a case-by-case basis. Researchers need to have a verified PayPal account in order to receive the monetary rewards.

PayPal follows in the footsteps of companies like Google, Mozilla and Facebook that have implemented security reward programs for their online services during the last couple of years. "While a small handful of other companies have implemented bug bounties, we believe we are the first financial services company to do so," Barrett said.

The bug-bounty programs run by Google, Mozilla and Facebook have had positive results so far, Barrett said. "I originally had reservations about the idea of paying researchers for bug reports, but I am happy to admit that the data has shown me to be wrong -- it's clearly an effective way to increase researchers attention on Internet-based services and therefore find more potential issues.".

The new bug-bounty program will help PayPal reduce the number of vulnerabilities in its websites, but they won't disappear completely, Marius Gabriel Avram, a security engineer at U.K.-based security firm RandomStorm said via email.

In his spare time, Avram looks for vulnerabilities in Web services operated by Google, Facebook, Twitter, Microsoft, eBay, PayPal and other companies that allow security researchers to do so, as long as they report their findings privately and don't cause any damage. It's like a challenge that helps security researchers improve their skills and, in some cases, earn some extra money, Avram said.

Avram found and reported over 10 security issues in PayPal's main and mobile websites during the past two weeks. Some of them were of high severity, he said, adding that PayPal's staff responded every time.

Not every company can afford to run a bug-bounty program. However, there are big companies with significant profits like eBay, Amazon, Sony and others that could and should implement such programs, especially since some of them have experienced data breaches in the past, Avram said.

Some hackers -- the so-called black hats -- abuse the vulnerabilities they find for illegal purposes. Others disclose them on their personal blogs or other public websites in order to make a name for themselves.

Avram believes that it's this second kind of hacker that paid bug-bounty programs could attract. Like Google and Facebook, PayPal realized that asking such people to report the security problems they find without any incentive doesn't really work, he said.

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