The fintech will use the grant from the Capability & Innovation Fund – part of the RBS Alternative Remedies Package – to create 64 “high quality” UK jobs, with more than 80 per cent of these located in Edinburgh.
Modulr, whose digital accounts provide an alternative to traditional bank accounts for business payments, has also committed to investing £10m of its own funds to support jobs growth and create new products.
This includes a payment control tool designed to provide greater control, automation and efficiency for accountants and small and medium-sized enterprises (SMEs).
The company currently reaches more than 35,000 SMEs through its client and partner network.
Earlier this year the fintech secured £14m in scale-up funding to accelerate development, expand into new markets and boost headcount.
Chief executive Myles Stephenson said: “Modulr was founded with a purpose to make money flow more efficiently through businesses and the economy. This award will help us deliver on our vision and passion to support SMEs to thrive across the UK.
“This is a great opportunity to bring an entirely new digital solution to market; the benefits of unlocking automation and straight-through payment processing will radically change the way SMEs and accountants do business.”