PayPal has fixed a security bug that could have allowed hackers to compromise the payment website's databases using an SQL injection attack.

Researchers at Vulnerability Laboratory earned a $3,000 reward for discovering and reporting the critical bug to PayPal in August. An advisory sent to the Full Disclosure security mailing list explained the scope of the vulnerability, which was fixed this month.

The flaw was found in the code that confirms an account holder's email address, and could have allowed attackers to get past PayPal's security filters to compromise backend databases and grab sensitive information.

"A blind SQL injection vulnerability was detected in the official PayPal e-commerce website application," Vulnerability Laboratory explained. "The vulnerability allows remote attackers or a local low-privileged application user account to inject or execute (blind) SQL commands on the affected application databases. The vulnerability is located in the 'confirm email address' module.

“The result is the successful execution of the SQL command when the module is reloading the page. Exploitation of the vulnerability requires a low-privileged application user account to access the website area and can be processed without user interaction."

Vulnerability Laboratory published a proof of concept exploit to underline its concerns. There's no evidence the vulnerability was actually abused or that it caused any harm.

Nonetheless it's good news that the flaw has been exorcised from PayPal's website. And the whole process that led to fixing the problem was lubricated by the payment biz's bug bounty programme, even though the financial reward in this particular case was modest.

Bug bounty programmes have become commonplace across the industry - a comprehensive list of them is here. The schemes offer an incentive for researchers to report flaws to software makers and websites, rather than sell them on the black market to miscreants.

The bugs tend to be found and fixed more quickly as a result, benefiting users and businesses in the process. And more and more vendors are joining in, with antivirus vendor Avast among the latest. Google in particular has become a master at getting positive attention for its own high-profile bug bounty programme.

PayPal, by contrast, was reluctant to talk about its own reward system, offering only a defensive statement in the wake of the Vulnerability Laboratory's advisory:

We don't discuss specific vulnerabilities identified by the Bug Bounty Program, however we can assure you that the SQL Injection vulnerability is not impacting our website.

Of course, PayPal is in the payment-handling business, and with millions of dollars trickling through it, this may account for its reluctance to get into any discussion of the security of its website. ®