I am developing a payment processing app for Android, and I want to prevent a hacker from accessing any resources, assets or source code from the APK file.
If someone changes the .apk extension to .zip then they can unzip it and easily access all the app's resources and assets, and using dex2jar and a Java decompiler, they can also access the source code. It's very easy to reverse engineer an Android APK file - for more details see Stack Overflow question Reverse engineering from an APK file to a project.
I have used the Proguard tool provided with the Android SDK. When I reverse engineer an APK file generated using a signed keystore and Proguard, I get obfuscated code. However, the names of Android components remain unchanged and some code, like key-values used in the app, remains unchanged. As per Proguard documentation the tool can't obfuscate components mentioned in the Manifest file.
Now my questions are:
1. How can I completely avoid reverse engineering of an Android APK? Is this possible?
AFAIK, there is not any trick for complete avoidance of reverse engineering.
And also very well said by @inazaruk: Whatever you do to your code, a potential attacker is able to change it in any way she or he finds it feasible. You basically can't protect your application from being modified. And any protection you put in there can be disabled/removed.
2. How can I protect all the app's resources, assets and source code so that hackers can't hack the APK file in any way?
You can do different tricks to make hacking harder though. For example, use obfuscation (if it's Java code). This usually slows down reverse engineering significantly.
3. Is there a way to make hacking more tough or even impossible? What more can I do to protect the source code in my APK file?
As everyone says, and as you probably know, there's no 100% security. But the place to start for Android, that Google has built in, is ProGuard. If you have the option of including shared libraries, you can include the needed code in C++ to verify file sizes, integration, etc. If you need to add an external native library to your APK's library folder on every build, then you can use it by the below suggestion.
Put the library in the native library path which defaults to "libs" in your project folder. If you built the native code for the 'armeabi' target then put it under libs/armeabi. If it was built with armeabi-v7a then put it under libs/armeabi-v7a.