By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology firms that are starting to make online services more practical.
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For several years, mobile payments failed to take off 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 slow web speeds have actually held Nigerian online consumers back however wagering firms says the brand-new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.

"We have seen considerable growth in the number of payment services that are offered. 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.
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"The operators will choose whoever is much faster, whoever can link to their platform with less problems and glitches," he stated, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has been matched by a rise in web payments, according to information 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 jumped 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, rising smart phone use and falling information expenses, Nigeria has long been viewed as a terrific opportunity for online services - once customers feel comfy with electronic payments.

Online gambling firms say that is happening, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online merchants.

British online sports betting 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 steady shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya said.

"The development in the variety of fintechs, and the government as an enabler, has actually helped business to thrive. These technological shifts encouraged Betway to begin operating in Nigeria," he said.
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FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's participation worldwide Cup say they are finding the payment systems developed by local start-ups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was established in 2002 and was the primary platform used by services running in Nigeria.
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"We included Paystack as one of our payment alternatives without any fanfare, without revealing to our consumers, and within a month it shot up to the top most secondhand payment choice on the site," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's 2nd most significant wagering company, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was added in late 2017.

Paystack was set up by two Nigerian computer technology 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 investors including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the number of regular monthly deals it processed increased 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 every month," said Emmanuel Quartey, Paystack's head of development.
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He said an environment of designers had actually emerged around Paystack, producing software to incorporate the platform into sites. "We have actually seen a development in that neighborhood and they have actually carried us along," said Quartey.

Paystack stated it makes it possible for payments for a variety of sports betting firms however also a wide variety of organizations, from energy services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to venture 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 intending to take advantage of sports betting wagering.

Industry experts state the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where business is more developed.

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last two years while Italy's Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi stated its sales were divided between stores and online however the ease of electronic payments, expense of running shops and ability for consumers to prevent the preconception of gaming in public suggested online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was crucial to have a shop network, not least due to the fact that numerous clients still remain unwilling to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering shops often serve as social centers where can view 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 watch Nigeria's last heat up video game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated 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 but I think that a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)