PayPal app for the iPhone is updated to fix security issues
Basically, the previous version did not verify the authenticity of PayPal's web site when users log in – which can possibly leave them vulnerable and open to attacks from hackers. PayPal spokeswoman Amanda Pires said, “To my knowledge [the flaw] has not affected anybody,” However, PayPal did mention that they would reimburse any user if they happen to fall victim to fraudulent charges.
So if you haven't done so already, it's probably a wise decision to download the latest version of the PayPal app for the iPhone to keep you safe.
source: Wall Street Journal