By Alexis Akwagyiram and Didi Akinyelure

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

For several years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have fostered a culture of cashless payments.

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

"We have actually seen significant growth in the number of payment solutions that are offered. All that is definitely changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is much faster, whoever can connect to their platform with less issues 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 development has actually been matched by a rise in web payments, according to data 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 first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, rising cellphone use and falling data costs, Nigeria has long been viewed as a fantastic chance for online companies - once consumers feel comfy with electronic payments.

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

British online wagering firm Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.
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"There is a gradual shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.
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"The growth in the number of fintechs, and the government as an enabler, has helped the company to prosper. These technological shifts encouraged Betway to start running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's involvement in the World Cup state they are discovering the payment systems developed by local start-ups such as Paystack are proving popular online.
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Paystack and another regional startup Flutterwave, both established in 2016, are offering competition for Nigeria's Interswitch which was set up in 2002 and was the main platform used by companies running in Nigeria.

"We included Paystack as one of our payment options without any fanfare, without revealing to our customers, and within a month it soared to the number one most secondhand payment alternative on the website," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's 2nd greatest wagering firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was included in late 2017.
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Paystack was established by 2 Nigerian computer 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 investors 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 deals it processed rose from about 8,000 in early 2016 to more than 900,000 as of June 2018.
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"In early 2016 we were processing about $3,000 a month. Today we process well over $11 million each and every single month," stated Emmanuel Quartey, Paystack's head of development.

He stated an ecosystem of developers had actually emerged around Paystack, creating software to incorporate the platform into websites. "We have seen a growth because community and they have actually brought us along," stated Quartey.

Paystack said it enables payments for a variety of sports betting companies but likewise a wide variety of services, from energy services to carry companies to insurance provider Axa Mansard.
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Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to investor 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 actually accompanied the arrival of foreign financiers hoping to tap into sports betting.
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Industry professionals state 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 trend, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, expense of running shops and capability for clients to prevent the preconception of gaming in public indicated online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a store network, not least because many customers still stay hesitant to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting shops frequently serve as social centers where customers can see soccer free of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to see Nigeria's last warm up game before the World Cup.

Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a TV screen inside. He said he started sports betting three months ago and bets up to 1,000 naira a day.

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