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By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic fraud and sluggish web speeds have actually held Nigerian online consumers back but sports betting companies says the brand-new, quick digital payment systems underpinning their sites are changing attitudes towards online deals.

"We have seen substantial development in the variety of payment options that are offered. All that is certainly changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is quicker, whoever can connect to their platform with less problems and glitches," he said, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has been 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 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 very 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 actually long been viewed as a fantastic chance for online organizations - once customers feel comfy with electronic payments.

Online gaming firms say that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online retailers.

British online sports betting firm 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 steady shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.

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

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria's involvement worldwide Cup say they are finding the payment systems created by regional startups such as Paystack are proving popular online.
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Paystack and another regional startup Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by organizations operating in Nigeria.
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"We included Paystack as one of our payment alternatives with no excitement, without announcing to our consumers, and within a month it shot up to the number one most pre-owned payment choice on the site," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's second biggest 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 because it was added in late 2017.

Paystack was set up by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley's Y-Combinator programme.

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

Paystack, based in the mad Ikeja district of Lagos, said the variety of monthly transactions 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," said Emmanuel Quartey, Paystack's head of growth.

He stated an ecosystem of designers had emerged around Paystack, developing software to integrate the platform into websites. "We have actually seen a development because neighborhood and they have carried us along," stated Quartey.

Paystack said it allows payments for a variety of sports betting firms however likewise a large range 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 program along with endeavor capitalists 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 accompanied the arrival of foreign financiers intending to use sports betting.
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Industry experts say the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.
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NairaBET's Alabi stated its sales were split between stores and online but the ease of electronic payments, expense of running stores and capability for consumers to prevent the stigma of sports betting in public meant online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a store network, not least since numerous consumers still remain reluctant to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops often act as social centers where consumers can view soccer totally free of charge while positioning bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria's final heat up game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He said he started gambling 3 months back and bets as much as 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos