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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are beginning to make online companies more practical.

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

Fear of electronic scams and slow web speeds have actually held Nigerian online consumers back but wagering firms says the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online transactions.

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

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

That development 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 reserve 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone usage and falling information costs, Nigeria has long been seen as a great opportunity for online services - 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 pure online retailers.

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

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

"The development in the variety of fintechs, and the federal government as an enabler, has helped business to thrive. These technological shifts motivated Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

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

Paystack and another local startup Flutterwave, both established in 2016, are offering competitors for Nigeria's Interswitch which was established in 2002 and was the main platform used by services running in .

"We added Paystack as one of our payment choices with no fanfare, without revealing to our consumers, and within a month it shot up to the top most secondhand payment choice on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second most significant wagering firm, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was included late 2017.

Paystack was established by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator programme.

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 frenetic Ikeja district of Lagos, stated the variety of monthly 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 each and every single month," stated Emmanuel Quartey, Paystack's head of development.

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

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

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as 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 corresponded with the arrival of foreign investors intending to use sports betting wagering.

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 organization is more developed.

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

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

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a store network, not least due to the fact that lots of consumers still stay unwilling to invest online.

He said the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering stores frequently serve as social hubs where consumers can watch soccer totally free of charge while placing bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He said he started gambling 3 months ago and bets approximately 1,000 naira a day.

"Since I have 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; editing by David Clarke)
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