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

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

Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back but sports betting firms says the brand-new, fast digital payment systems underpinning their sites are changing mindsets towards online transactions.

"We have actually seen substantial growth in the number of payment solutions that are offered. All that is absolutely altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

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

That growth 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 central 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 information expenses, Nigeria has actually long been viewed as an excellent chance for online services - once customers feel comfy with electronic payments.

Online gambling firms say that is occurring, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

British online wagering firm 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 gradual 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 assisted business to thrive. These technological shifts motivated Betway to begin running in Nigeria," he said.
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FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's participation on the planet Cup state they are discovering the payment systems created by regional startups such as Paystack are showing popular online.

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

"We added Paystack as one of our payment options with no excitement, without announcing to our consumers, and within a month it soared to the top most secondhand payment alternative on the site," said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second greatest sports betting firm, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included late 2017.

Paystack was established by 2 Nigerian computer system graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator program.

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 number of month-to-month transactions 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 development.

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

Paystack said it enables payments for a number of wagering companies however also a large range of services, from utility services to carry companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have accompanied the arrival of foreign investors hoping to tap into sports betting wagering.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split between stores and online however the ease of electronic payments, expense of running stores and capability for customers to prevent the stigma of gambling in public suggested online transactions would grow.

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

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian sports betting shops often act as social hubs where clients can view soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's last heat up 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 TV screen inside. He said he started sports betting three months earlier and bets up to 1,000 naira a day.

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