By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology firms that are starting to make online businesses more viable.

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

Fear of electronic scams and sluggish web speeds have held Nigerian online consumers back however wagering companies states the brand-new, fast digital payment systems underpinning their sites are changing mindsets towards online transactions.

"We have seen considerable development in the number of payment services that are available. All that is certainly changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.
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"The operators will go with whoever is much faster, whoever can link to their platform with less issues and problems," he said, including that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
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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 an overall 132 billion naira ($420 million). Transactions jumped 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, increasing smart phone usage and falling information costs, Nigeria has actually long been seen as a great opportunity for online companies - once consumers feel comfortable with electronic payments.

Online gaming firms state that is happening, though reaching the 10s of countless Nigerians without access to banking services remains an obstacle for pure online sellers.

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

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

"The development in the number of fintechs, and the government as an enabler, has actually assisted the company to prosper. These technological shifts motivated Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped 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 founded in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the primary platform used by services operating in Nigeria.

"We included Paystack as one of our payment choices without any fanfare, without announcing to our clients, and within a month it shot up to the top most pre-owned payment alternative on the site," stated Akin Alabi, founder of NairabBET.
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He stated NairaBET, the nation's second greatest sports betting firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option since it was included in late 2017.

Paystack was established by two Nigerian computer technology 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 financiers including China's Tencent and Comcast Ventures in the United States.
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Paystack, based in the mad Ikeja district of Lagos, said the variety of regular monthly deals it processed increased 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 a community of designers had emerged around Paystack, developing software application to incorporate the platform into sites. "We have seen a development in that neighborhood and they have actually carried us along," stated Quartey.
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Paystack stated it allows payments for a variety of sports betting firms but also a wide variety of companies, from utility services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with venture 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 intending to take advantage of sports betting.

Industry specialists say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the service is more established.

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

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

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was crucial to have a shop network, not least since lots of clients still stay unwilling to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering stores often serve as social hubs where customers can view soccer complimentary of charge while positioning bets.

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

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

"Since I have actually 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