"Cracking Open Your (Google) Wallet"

From McAfee blog:

We suggested earlier that instead of going after the Secure Element chip and the information it keeps safe, attackers would go after the weaker point of the Google Wallet app. Security researcher Joshua Rubin has now created a proof-of-concept app, Google Wallet Cracker, that can recover the Google Wallet PIN on a rooted phone. 

Once attackers get your PIN, they have full access to any credit card information stored in the app and they can use your phone to make purchases. As a user of Google Wallet, the main security you see is the PIN. What makes Wallet easy for you to use now makes it easy for attackers to use; they can now spend your money and credit just as if your phone were an ATM card. 

How It WorksThe vulnerability involves storing an encrypted hash of the Google Wallet PIN in a database that belongs to the app. Because it’s not stored in the Secure Element chip, the only protection is Android’s user ID-based “sandboxing.” Normally malicious apps can’t access files belonging to another app, but once the phone is rooted that protection and any others are gone.

Google Wallet Cracker app checks whether the phone is rooted.

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How Do We Stay Safe?Currently only Nexus S or Galaxy Nexus users can run Google Wallet. Rubin has responsibly disclosed the vulnerability to Google and the company is now working on patching Android to prevent such attacks. The Google Wallet Cracker is not publicly available. 

Google Wallet users can take a number of steps to protect themselves:

• Use a lock code/password, swipe pattern, or face unlock

• Keep your phone close and in your possession. If attackers don’t have physical access to your phone, they can’t install malicious apps or spyware.

• Install antivirus software on the phone to protect against unwanted root exploits and spyware

"Android Market Gets a Bouncer to Kick Out Malware"

From McAfee blog:

Today Google announced its Bouncer security service for the Android Market. This is a good initial step in protecting Android users. 

Respect the BouncerTo keep out known troublesome apps, the service performs a malware and spyware scan on all submitted material. It also uses behavioral analysis to determine if a given app is trying to do something suspicious. Google doesn’t stop there; it also does fraud and abuse detection to ban and remove malware writers posing as legitimate developers.

Other ProtectionsAside from Bouncer, Google has older methods of protecting users from bad apps. The company cites its “remote app removal switch,” which allows Google to remotely uninstall apps that violate its policies and or are malicious. Although this is good for handling most basic Android malware, additional measures are sometimes necessary. Sandboxing apps is very useful but is also a double-edged sword. On one side it keeps the average malicious app from accessing user data in other apps; on the other, however, it prevents Google and other security vendors from easily cleaning a device of advanced malware. In the case of malware such as Android/DrdDream or Android/DrddreamLite, which use root exploits to gain total control of a device, it’s necessary to go a step further. These threats that use root exploits completely bypass app sandboxing, requiring stronger methods to remove them. Google now provides a tool that runs on infected devices and removes all malware that were impossible to clean up with the remote removal function.

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Is a ‘Bouncer’ Enough?We haven’t yet seen many details about Bouncer internals, but what we’ve seen so far bodes well for Android security. By itself Bouncer is not enough to clean up all infected devices or to keep all malware out of the market. There will still be a need for further innovation in security software and for defense in depth. The Android security team has a lot of clever people on it and no doubt they will continue to improve security while maintaining Android’s open nature.