By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology firms that are starting to make online companies more viable.
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For several 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 actually cultivated a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back but wagering firms says the brand-new, quick digital payment systems underpinning their sites are altering mindsets towards online deals.

"We have seen significant growth in the number of payment solutions that are readily available. All that is definitely altering the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will go with whoever is quicker, whoever can connect to their platform with less issues and problems," he stated, including that taxes from sports betting 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 a total 132 billion naira ($420 million). Transactions leapt 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 almost 190 million, rising cellphone usage and falling data expenses, Nigeria has actually long been seen as an excellent opportunity for online companies - once consumers feel comfortable with electronic payments.

Online gambling companies say that is occurring, though reaching the 10s of countless Nigerians without access to banking services remains an obstacle for pure online merchants.

British online wagering firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released 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 stated.

"The growth in the number of fintechs, and the federal government as an enabler, has actually assisted the service to flourish. These technological shifts encouraged Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's in the World Cup say they are finding the payment systems produced by local start-ups such as Paystack are showing popular online.
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Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by organizations running in Nigeria.

"We included Paystack as one of our payment choices without any excitement, without revealing to our clients, and within a month it soared to the top most secondhand payment alternative on the website," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's second greatest sports betting firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice because it was added in late 2017.
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Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley's Y-Combinator program.
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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 frenetic Ikeja district of Lagos, stated the variety of month-to-month deals it processed rose 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 each and every single month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack stated it makes it possible for payments for a number of sports betting firms however likewise a large range of services, from utility services to transport companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also 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 in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually coincided with the arrival of foreign financiers wanting to use sports betting wagering.

Industry specialists state 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 set up in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi said its sales were split in between shops and online however the ease of electronic payments, cost of running stores and capability for clients 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 shop network, not least since many consumers still remain unwilling to spend online.

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

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans gathered to view Nigeria's final heat up video game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he began gambling 3 months ago and bets approximately 1,000 naira a day.

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