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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology firms that are starting to make online companies more feasible.

For several years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.

Fear of electronic scams and slow internet speeds have held Nigerian online customers back but wagering firms states the new, fast digital payment systems underpinning their sites are altering mindsets towards online transactions.

"We have seen considerable growth in the number of payment solutions that are readily available. All that is definitely changing the video gaming area," said 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 faster, whoever can link to their platform with less issues and problems," he stated, including that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development 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 reserve bank and licensed banks.

In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions leapt 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 almost 190 million, rising mobile phone use and falling data expenses, Nigeria has long been seen as a fantastic chance for online companies - once consumers feel comfy with electronic payments.

Online gambling firms state that is taking place, though reaching the 10s of countless Nigerians without access to banking services remains a challenge for pure online sellers.

British online wagering firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

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

"The development in the variety of fintechs, and the government as an enabler, has assisted the company to thrive. These technological shifts encouraged Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's participation in the World Cup say they are discovering the payment systems created by regional startups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform used by businesses running in Nigeria.

"We added Paystack as one of our payment choices without any excitement, without announcing to our customers, and within a month it soared to the number one most pre-owned payment choice on the site," stated Akin Alabi, founder of NairabBET.
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He said NairaBET, the nation's second biggest sports betting company, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most choice since it was included in late 2017.
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Paystack was set up by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from investors including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, stated the variety of month-to-month deals it processed increased 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 month," stated Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it allows payments for a variety of sports betting companies but also a broad range of services, from utility services to transport companies to insurance provider Axa Mansard.

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

FOREIGN INVESTMENT
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Shifts in Nigeria's payment culture have actually corresponded with the arrival of foreign investors intending to take advantage of sports betting wagering.

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

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a half stake in market leader 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, cost of running shops and ability for consumers to prevent the preconception of gambling in public indicated online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was important to have a shop network, not least because many consumers still stay hesitant to invest online.
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He said the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting stores typically serve as social centers where consumers can view soccer free of charge while placing bets.
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At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to see Nigeria's final heat up game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a TV screen inside. He said he started gambling three months earlier and bets approximately 1,000 naira a day.

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