Underscoring the issue of security for mobile payments, Chinese mobile payment users are dealing with a nasty bit of malware. The SMSZombie virus is targeting the mobile payment system of state-owned wireless provider China Mobile. According to several reports, the virus, which only affects Android devices, has currently infected 500,000 devices.

Mobile security provider TrustGo is credited with first identifying the virus in late July. A post on the company's blog explained that the virus is able to generate unauthorized payments, steal bank card numbers and money transfer receipt information.

The virus has been hidden in popular applications available in one of China's app marketplaces. The Chinese market for mobile apps is rather more open than other countries, and there are few protections in place for users.

At this point the malware has affected only a small fraction of China Mobile's subscriber base, and it is isolated to China. But considering that China Mobile is the world's largest mobile provider with more than 650 million subscribers, and TargetGo describes the malware as both complex and sophisticated, the SMSZombie virus could be a precursor to a more widespread outbreak as mobile money systems grow.

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