In reply to tom_in_edinburgh:
They do have the technology - UKFP.
I don't agree that this is a cynical money-making scheme from the banks. It doesn't make sense as most domestic payments are just going into another bank account at a handful of banks. The net impact of all these payments on any given bank's deposits will be minimal.
I agree with you that the payments system is poor and could/should be improved. However, as none of these systems are proprietary systems of a single bank there is a lack of incentive.
Secondly, there is a huge risk factor in taking away a system that processes payments worth millions of pounds each day. Many of these systems support other systems built into bank's central reporting, apps, online banking and so on. Trying to move these payments on to a new system is a potential disaster no one wants to be responsible for. The systems architecture is an appalling nightmare and needs overhauling but involves undoing decades of poorly planned tweaks, bolt-ons and 'improvements'.
Lastly, and probably most important, banks are potentially liable to huge fines from the PRA and FCA if they allow fraudulent payments or money laundering to go through their systems (unless they can show they have taken every reasonable step to avoid this). Most of the payments filtering is done automatically, but transactions flagged as risky will often go to a real human for review. If transactions are instant, it becomes much easier for fraudsters and money launders to disappear into the sunset with the cash before anything can be done. Either that or you have many times more legitimate payments being rejected because of fraud/money laundering risk.