The Financial Conduct Authority (FCA) announced today that seven of the UK’s biggest high street banks have committed to use a same day retry system when processing direct debits, standing orders and future dated bill payments.

Barclays, The Co-operative, HSBC, Nationwide, RBS Group, Santander and National Australia Group will in future process payments twice a day – in the morning and afternoon – before finalising transactions. Lloyds will widen its same day retry policy to cover all transactions.

The move is expected to save consumers £200m a year in late payments caused by missing funds in bank accounts at the time outgoing payments are made.

FCA director of supervision Clive Adamson said: “It is little things like this that have a big impact on customers’ everyday banking experience, even though many people won’t be familiar with the process. This is a small adjustment, but one that will make a big difference.

The banks will also have to inform their customers about the time by which money must be in their account to meet outgoing payments.

Banks were not legally required to implement the new system but reached an agreement with the regulator.

Adamson said: “We are committed to putting customer interests at the heart of everything the FCA does, and it’s encouraging that the banks are also beginning to take this approach.”

The FCA said the agreement was part of a wider overhaul of the banking industry to make it more consumer friendly.

The regulator is set to review recurring transactions in the summer and further changes to the industry are expected to be introduced during 2014.