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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology companies that are starting to make online businesses more viable.
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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 cash transfers have actually promoted a culture of cashless payments.

Fear of electronic scams and slow internet speeds have actually held Nigerian online customers back however sports betting companies says the new, fast digital payment systems underpinning their websites are altering attitudes towards online deals.

"We have seen substantial growth in the number of payment options that are available. All that is certainly changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will go with whoever is much faster, whoever can connect to their platform with less problems and problems," he stated, including that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development has actually 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 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone usage and falling information expenses, Nigeria has actually long been seen as a terrific opportunity for online businesses - once customers feel comfortable with electronic payments.

Online sports betting companies state that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online sellers.

British online wagering company 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 assisted business to flourish. These technological shifts motivated Betway to start running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's involvement worldwide Cup say they are finding the payment systems developed by local startups such as Paystack are showing popular online.

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

"We added Paystack as one of our payment choices with no excitement, without announcing to our customers, and within a month it shot up to the primary most secondhand payment choice on the website," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's 2nd greatest sports betting company, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option because it was included in late 2017.

Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early phase 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, said the number of month-to-month 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 month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it enables payments for a number of sports betting companies but also a large variety of companies, from utility services to transport business to insurance provider 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 last year.

FOREIGN INVESTMENT

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

Industry professionals say the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the organization is more established.

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 half stake in market leader Bet9ja when the Nigerian company launched in 2015.

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

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least because lots of consumers still remain unwilling to spend online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores frequently serve as social centers where customers can watch soccer totally free of charge while placing bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He said he began gambling three months earlier and bets approximately 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos