Besides BIP 62, which will take time to finalize, what can be done to prevent this attack? What steps can wallets and payment processors take? Thanks for being a good sport.
Stop relying on others to validate your transactions and watch the blockchain for you.
Also, (this is the biggest one) don't categorize transactions based on transaction ID, then store them away and never check them again.
It's not that hard. But it's hard when the wallet is already built from the ground up under the assumption that "Once we see a transaction, even with 0 confirmations, it's as good as done."
Stop making that assumption, and code your wallets accordingly.
Also, there needs to be vigilance on the user side as well.
If you spend unconfirmed change, you are risking the chain being broken.
If you accept unconfirmed transactions with unconfirmed inputs, you are at a large risk of being double spent if you don't wait for at least one confirmation.
The only sure-fire way to prevent becoming a victim is to wait for confirmations.
