By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown innovation companies that are starting to make online organizations more practical.

For several years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have actually cultivated a culture of cashless payments.

Fear of electronic scams and slow internet speeds have held Nigerian online customers back but sports betting firms states the new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.

"We have actually seen substantial growth in the number of payment services that are available. All that is definitely altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in capital.

"The operators will opt for whoever is much faster, whoever can link to their platform with less issues and glitches," he said, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has actually been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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 nearly 10 million worth 61 billion.
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With a young population of nearly 190 million, rising cellphone use and falling data expenses, Nigeria has long been viewed as a great chance for online services - once consumers feel comfortable with electronic payments.
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Online sports betting firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online sellers.

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

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

"The development in the number of fintechs, and the federal government as an enabler, has actually helped business to prosper. These technological shifts encouraged Betway to start running in Nigeria," he said.
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FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's participation in the World Cup state they are discovering the payment systems developed by regional start-ups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both established in 2016, are offering competitors for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by companies operating in Nigeria.

"We added Paystack as one of our payment options without any excitement, without revealing to our clients, and within a month it shot up to the number one most pre-owned payment alternative on the site," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's second most significant wagering firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice since it was included late 2017.
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Paystack was established by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator program.
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In December 2016, it raised $1.3 million from investors consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, stated the number of monthly deals it processed rose from about 8,000 in early 2016 to more than 900,000 since June 2018.

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

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

Paystack stated it allows payments for a number of wagering firms but also a vast array of companies, from energy services to transport business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program along with investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
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FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have coincided with the arrival of foreign investors wishing to use sports betting.

Industry experts say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the organization is more developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi stated its sales were split between shops and online however the ease of electronic payments, cost of running stores and capability for clients to prevent the preconception of sports betting in public meant online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least since lots of consumers still stay unwilling to spend online.
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He said the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops frequently act as social hubs where consumers can see soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's last warm up video game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He said he began sports betting three months earlier and bets up to 1,000 naira a day.

"Since I have been playing I have not won anything however I think that a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos