By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology companies that are beginning to make online organizations more viable.

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

Fear of electronic scams and slow web speeds have actually held Nigerian online customers back however wagering companies states the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online deals.

"We have actually seen considerable development in the number of payment solutions that are readily available. All that is absolutely altering the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

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

That growth has been matched by an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and certified 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 nearly 190 million, rising mobile phone use and falling data costs, Nigeria has actually long been seen as a fantastic chance for online businesses - once consumers feel comfy with electronic payments.

Online sports betting firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services stays an obstacle for pure online merchants.

British online sports betting firm Betway opened its first African business 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 said.
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"The development in the number of fintechs, and the government as an enabler, has actually helped the organization to thrive. These technological shifts motivated Betway to start running in Nigeria," he stated.
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FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's participation worldwide Cup state they are discovering the payment systems produced by regional start-ups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by organizations operating in Nigeria.

"We included Paystack as one of our payment options without any excitement, without revealing to our consumers, and within a month it soared to the top most pre-owned payment choice on the site," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's second most significant wagering firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included late 2017.
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Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley's Y-Combinator program.

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, stated the variety of regular 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 development.

He said an ecosystem of developers had actually emerged around Paystack, producing software to integrate the platform into sites. "We have actually seen a development in that neighborhood and they have actually brought us along," stated Quartey.

Paystack stated it allows payments for a variety of wagering companies however likewise a vast array of organizations, from utility services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to endeavor capitalists 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 coincided with the arrival of foreign financiers wishing to use sports betting wagering.

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

Russia's 1XBet and Slovakia's DOXXbet have both established 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 firm released in 2015.

NairaBET's Alabi said its sales were between stores and online but the ease of electronic payments, expense of running shops and ability for clients to avoid the preconception of gaming in public indicated online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was important to have a store network, not least since lots of clients still remain reluctant to spend online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering stores typically serve as social hubs 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 see Nigeria's last heat up video game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He said he started gambling 3 months back and bets approximately 1,000 naira a day.

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