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

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

Fear of electronic scams and sluggish internet speeds have actually held Nigerian online consumers back but sports betting companies says the brand-new, quick digital payment systems underpinning their sites are altering attitudes towards online deals.

"We have actually seen considerable development in the number of payment solutions that are readily available. All that is certainly altering the video gaming area," stated Seun Anibaba, CEO of Lagos State Board, video gaming regulator in Nigeria's commercial capital.
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"The operators will go with whoever is quicker, whoever can connect to their platform with less problems and problems," he stated, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has actually been matched by a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and licensed banks.

In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone usage and falling data costs, Nigeria has long been seen as a terrific chance for online businesses - once customers feel comfortable with electronic payments.

Online sports betting firms say that is taking place, though reaching the tens of countless Nigerians without access to banking services stays a difficulty for pure online sellers.

British online sports betting 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 steady shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya said.

"The growth in the variety of fintechs, and the federal government as an enabler, has helped the organization to flourish. These technological shifts encouraged Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's involvement worldwide Cup state they are finding the payment systems created by local start-ups such as Paystack are showing popular online.

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

"We added Paystack as one of our payment alternatives without any excitement, without announcing to our customers, and within a month it shot up to the top most used payment alternative on the website," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second biggest wagering firm, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was included late 2017.

Paystack was set up by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early stage 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 variety of month-to-month transactions 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 development.

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

Paystack said it enables payments for a variety of wagering firms however also a vast array of businesses, from energy services to carry companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as 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 actually accompanied the arrival of foreign investors hoping to take advantage of sports betting.

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

Russia's 1XBet and Slovakia's DOXXbet have 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 firm released in 2015.

NairaBET's Alabi stated its sales were split between shops and online but the ease of electronic payments, expense of running stores and ability for consumers to prevent the stigma of sports betting in public meant online deals would grow.
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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 because many consumers still remain hesitant to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops frequently function as social centers where customers can watch 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 watch Nigeria's final warm up game before the World Cup.
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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 approximately 1,000 naira a day.

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