By Alexis Akwagyiram and Didi Akinyelure

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 beginning to make online services more practical.

For years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back but sports betting companies states the brand-new, fast digital payment systems underpinning their sites are towards online deals.

"We have actually seen considerable growth in the number of payment services that are available. All that is certainly altering the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.
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"The operators will choose whoever is quicker, whoever can connect to their platform with less issues and glitches," 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 reserve bank and licensed banks.

In 2016, there were 14 million web payments worth a total 132 billion naira ($420 million). Transactions jumped 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 nearly 190 million, increasing mobile phone usage and falling data expenses, Nigeria has actually long been seen as a terrific opportunity for online organizations - once consumers feel comfortable with electronic payments.

Online gambling firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services stays a difficulty for pure online merchants.

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

"There is a progressive shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The development in the variety of fintechs, and the federal government as an enabler, has actually assisted the organization to grow. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION
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sports betting companies capitalizing the soccer craze worked up by Nigeria's involvement worldwide Cup state they are discovering the payment systems created by local startups such as Paystack are proving popular online.

Paystack and another local 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 used by companies operating in Nigeria.

"We added Paystack as one of our payment choices without any fanfare, without announcing to our consumers, and within a month it soared to the number one most secondhand payment choice on the website," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's second biggest sports betting firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice considering that it was included late 2017.

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from investors consisting of 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 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 each and every single month," said Emmanuel Quartey, Paystack's head of development.

He stated an ecosystem of developers had emerged around Paystack, developing software application to incorporate the platform into websites. "We have actually seen a growth in that community and they have actually brought us along," stated Quartey.

Paystack said it makes it possible for payments for a number of sports betting companies however also a wide variety of organizations, from energy services to transfer companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to endeavor 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 accompanied the arrival of foreign financiers intending to tap into sports betting wagering.

Industry specialists state the sector generates 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 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 firm launched in 2015.
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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 customers to prevent the preconception of sports betting in public meant online transactions would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was crucial to have a shop network, not least because numerous clients still stay hesitant to spend online.
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He said the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting shops typically act as social hubs where consumers can watch soccer free of charge while positioning bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans gathered to see Nigeria's last warm up video game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he began sports betting three months ago and bets as much as 1,000 naira a day.

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