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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation firms that are starting to make online organizations more viable.

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

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

"We have actually seen considerable development in the number of payment solutions that are available. All that is absolutely altering the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is quicker, whoever can connect to their platform with less concerns and glitches," he stated, including 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 reserve bank and licensed 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, increasing smart phone use and falling data costs, Nigeria has long been seen as a terrific chance for online companies - once consumers feel comfortable with electronic payments.

Online sports betting firms say that is happening, though reaching the tens of countless Nigerians without access to banking services remains an obstacle for pure online retailers.

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

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

"The growth in the variety of fintechs, and the government as an enabler, has actually helped the company to flourish. These technological shifts encouraged Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze worked up by Nigeria's involvement worldwide Cup say they are finding the payment systems developed by local startups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are offering competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by services running in Nigeria.

"We included Paystack as one of our payment options with no fanfare, without revealing to our clients, and within a month it shot up to the top most pre-owned payment alternative on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second greatest wagering company, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given 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 stage financing in Silicon Valley's Y-Combinator .

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 month-to-month 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 single month," said Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of designers had emerged around Paystack, creating software to incorporate the platform into websites. "We have actually seen a growth in that neighborhood and they have actually carried us along," stated Quartey.

Paystack said it allows payments for a variety of wagering firms but likewise a wide variety of companies, from energy services to transport business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually corresponded with the arrival of foreign financiers hoping to take advantage of sports betting.

Industry specialists state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more established.

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

NairaBET's Alabi stated its sales were divided between stores and online but the ease of electronic payments, cost of running stores and capability for consumers to avoid the stigma of sports betting 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 necessary to have a store network, not least because many consumers still remain reluctant to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering shops often act as social hubs where consumers can enjoy soccer totally free of charge while positioning bets.

At a BetKing hall deep inside the busy 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 makes 25,000 naira a month, was focused on a television screen inside. He said he started sports betting 3 months ago and bets as much as 1,000 naira a day.

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