The so-called retry system for bounced payments in UK banks has been extended to a minimum of 2pm across 29 high street banks and building societies, with effect from September 2014.

The system was introduced in July 2013, following an agreement between the Financial Conduct Authority (FCA) and seven of the UK’s biggest banks.

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It meant that if there were insufficient funds for pre-notified payments, the customer had a grace period to put funds into the account before payment collection was retried.

Following the latest standardisation, customers now have until at least 2pm. The first banks that signed up offered varying cut-off times. A Payments Council spokesperson said:

"The thing is consistency; now customers can be assured that they have as a minimum until 2pm to get funds into their account for the retry. However, banks may compete and offer their customers a later cut-off time.

"We’re trying to give it that standard across the industry just so that customers can be more certain of where they stand."
In terms of market share, since July 2013, "well above 90%" of customers have had this service. Previously, unpaid item fees amounted to around £200m ($332.9) a year.

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"It is a benefit for customers, undoubtedly, but it’s something they might have had in place for longer than they realised," the spokesperson added.

The latest banks to sign up include Tesco Bank, Coutts, Virgin Money and M&S Bank. Cheques would not be ‘retried’ under the system but this is at the banks’ discretion and some may compete by allowing the service to cover cheques.

In the UK in 2013 there were 3.5bn direct debit payments, 331m standing order payments and 150m future-dated payments.