The PCI standard is a set of 12 security requirements that all entities handling credit cards were expected to have in place by June 2005. The standards call for, among other things, the encryption of cardholder data, periodic network vulnerability scans, logical and physical access controls, and activity monitoring and logging. The requirements are being promoted by all of the major payment brands, including American Express Co., Visa International Inc., MasterCard Worldwide, Discover Financial Services and Japan Credit Bureau.

Last week, the companies released Version 1.1 of the standard, featuring some expected changes. They also announced the creation of the PCI Security Standards Council LLC, a Wakefield, Mass.-based company that will be responsible for developing and maintaining the standards.

Both moves have been expected for some time now, said Khalid Kark, an analyst at Forrester Research Inc. in Cambridge, Mass. Even so, the announcements should help drive broad adoption of the standard, he said.

One of the most significant changes in the new version is the allowance for companies to put in compensating controls in cases where they are unable to implement a prescribed requirement because of technical or cost reasons. For instance, firms that find it difficult to encrypt stored cardholder data will no longer be absolutely obligated to put that specific control in place -- as long as they can verifiably demonstrate other equally good measures for mitigating risk to the data, said Seana Pitt, chairwoman of the new company.

As long as companies can demonstrate to a PCI auditor that they are meeting "the end goal of protecting the data" via compensating controls, they will be considered in compliance with PCI requirements she said.