By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation companies that are beginning to make online organizations more practical.
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For many years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have promoted a culture of cashless payments.

Fear of electronic scams and slow web speeds have actually held Nigerian online customers back but sports betting firms says the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online deals.

"We have actually seen considerable growth in the variety of payment options that are readily available. All that is certainly changing the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.
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"The operators will opt for whoever is quicker, whoever can connect to their platform with less issues and problems," he stated, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth has actually been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and licensed banks.

In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions jumped to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising mobile phone use and falling data costs, Nigeria has actually long been viewed as a fantastic opportunity for online companies - once consumers feel comfortable with electronic payments.

Online gaming companies state that is happening, though reaching the 10s of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

British online sports betting company Betway opened its first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The growth in the number of fintechs, and the federal government as an enabler, has helped business to flourish. These technological shifts encouraged Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's participation in the World Cup say they are discovering the payment systems produced by local start-ups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by companies running in Nigeria.

"We included Paystack as one of our payment choices without any excitement, without revealing to our clients, and within a month it soared to the number one most pre-owned payment choice on the site," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's second greatest sports betting company, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice because it was added in late 2017.
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Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from investors consisting of China's Tencent and Comcast Ventures in the United States.
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Paystack, based in the frenetic Ikeja district of Lagos, said the number of monthly deals it processed rose from about 8,000 in early 2016 to more than 900,000 as of June 2018.

"In early 2016 we were processing about $3,000 a month. Today we process well over $11 million every single month," stated Emmanuel Quartey, Paystack's head of growth.

He stated a community of developers had emerged around Paystack, developing software application to integrate the platform into sites. "We have actually seen a growth in that community and they have actually brought us along," stated Quartey.

Paystack stated it enables payments for a variety of sports betting companies but likewise a wide variety of companies, from energy services to carry companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually accompanied the arrival of foreign financiers hoping to tap into sports betting wagering.

Industry professionals state the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi said its sales were split between stores and online but the ease of electronic payments, expense of running stores and capability for customers to avoid the stigma of gambling in public suggested online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least since lots of clients still stay hesitant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering stores frequently function as social centers where consumers can see soccer complimentary of charge while positioning bets.
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At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's final heat up video game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He said he started sports betting three months back and bets as much as 1,000 naira a day.

"Since I have actually been playing I have actually not won anything but I believe that one day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos