By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation firms that are beginning to make online companies more practical.

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

Fear of electronic scams and sluggish web speeds have actually held Nigerian online consumers back but wagering firms states the new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.

"We have actually seen significant growth in the number of payment solutions that are offered. All that is definitely changing the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

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

That development has been matched by an increase in web payments, according to information 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, rising 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 gaming firms state that is taking place, though reaching the tens 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 business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

"There is a gradual shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya said.
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"The development in the number of fintechs, and the government as an enabler, has actually assisted the company to flourish. These technological shifts motivated Betway to start operating in Nigeria," he said.
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FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's involvement on the planet Cup state they are discovering the payment systems produced by local start-ups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by businesses operating in Nigeria.

"We added Paystack as one of our payment choices without any fanfare, without revealing to our clients, and within a month it shot up to the top most pre-owned payment choice on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's 2nd most significant sports betting firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative given that it was included in late 2017.

Paystack was established by 2 Nigerian computer system science graduates, 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 consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic 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 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 growth.

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

Paystack stated it allows payments for a variety of sports betting firms but also a wide variety of organizations, from energy services to transport business to insurance provider Axa Mansard.

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

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

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 trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split between shops and online but the ease of electronic payments, cost of running shops and ability for customers to avoid the stigma of sports betting in public suggested online transactions 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 shop network, not least due to the fact that numerous consumers still remain reluctant to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering stores typically act as social centers where customers can enjoy soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's last warm up video game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a television screen inside. He said he started sports betting three months ago and bets up to 1,000 naira a day.

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