By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology firms that are beginning to make online companies more practical.
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For many years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have actually fostered a culture of cashless payments.

Fear of electronic scams and slow internet speeds have held Nigerian online customers back but sports betting firms says the new, quick digital payment systems underpinning their sites are altering attitudes towards online deals.
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"We have seen considerable growth in the number of payment solutions that are readily available. All that is definitely changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is much faster, whoever can link to their platform with less concerns and glitches," 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 information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and certified banks.

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

With a young population of almost 190 million, rising cellphone use and falling information expenses, Nigeria has long been seen as a great chance for online businesses - once customers feel comfortable with electronic payments.

Online gambling companies say that is occurring, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online sellers.

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

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

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

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy worked up by Nigeria's involvement on the planet Cup say they are discovering the payment systems produced by regional start-ups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by organizations running in Nigeria.

"We added Paystack as one of our payment options without any excitement, without revealing to our customers, and within a month it shot up to the number one most used payment choice on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second greatest wagering company, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option since it was added in late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from financiers 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 month-to-month 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 every single month," stated Emmanuel Quartey, Paystack's head of development.

He stated a community of developers had actually emerged around Paystack, producing software application to incorporate the platform into sites. "We have seen a growth because neighborhood and they have actually carried us along," said Quartey.

Paystack said it allows payments for a number of sports betting firms however likewise a broad variety of companies, from utility services to carry companies to insurer Axa Mansard.

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

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually coincided with the arrival of foreign financiers hoping to take advantage of sports betting.

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

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi stated its sales were split in between shops and online however the ease of electronic payments, expense of running stores and ability for consumers to prevent the preconception of gaming in public indicated 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 consumers still stay hesitant to invest online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a . Nigerian sports betting shops typically act as social centers where customers can enjoy soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to view Nigeria's final heat up video 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 stated he began sports betting three months ago and bets approximately 1,000 naira a day.

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