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 technology firms that are starting to make online companies more feasible.

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

Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back but sports betting companies says the new, fast digital payment systems underpinning their sites are changing attitudes towards online deals.
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"We have seen substantial growth in the variety of payment services that are available. All that is absolutely altering 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 much faster, whoever can link to their platform with less issues and glitches," he said, adding that taxes from sports betting wagering 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 central bank and licensed banks.

In 2016, there were 14 million web payments worth a total 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 nearly 190 million, increasing mobile phone use and falling data expenses, Nigeria has actually long been seen as a fantastic chance for online services - once consumers feel comfy with electronic payments.

Online sports betting companies state that is occurring, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online merchants.

British online wagering firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

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

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

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy worked up by Nigeria's participation worldwide Cup state they are finding the payment systems produced by local start-ups such as Paystack are showing popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by companies operating in Nigeria.

"We added Paystack as one of our payment alternatives with no fanfare, without announcing to our customers, and within a month it shot up to the primary most secondhand payment choice on the site," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's 2nd most significant wagering company, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was included in late 2017.

Paystack was set up by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early phase financing in Silicon Valley's Y-Combinator programme.
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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, said the number of month-to-month deals it processed increased 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," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack stated it allows payments for a variety of sports betting companies but likewise a wide variety of businesses, from energy services to transfer companies to insurance company Axa Mansard.

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

professionals say the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the company is more developed.

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 pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi said its sales were split in between stores and online but the ease of electronic payments, cost of running stores and ability for consumers to avoid 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 very important to have a store network, not least since lots of customers still stay hesitant to spend online.

He said the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting stores often act as social centers where customers can watch soccer complimentary of charge while putting bets.
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At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to enjoy Nigeria's final warm up game before the World Cup.

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

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