By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation companies that are beginning to make online organizations more feasible.
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For several years, mobile payments failed to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have cultivated a culture of cashless payments.
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Fear of electronic scams and slow internet speeds have held Nigerian online consumers back however wagering firms states the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online deals.
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"We have actually seen substantial growth in the variety of payment options that are readily available. All that is absolutely changing the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will opt for whoever is faster, whoever can connect to their platform with less concerns and problems," he stated, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has been matched by an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising smart phone usage and falling information expenses, Nigeria has long been viewed as an excellent chance for online companies - once consumers feel with electronic payments.

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

British online sports betting company Betway opened its very first African service 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 industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The development in the number of fintechs, and the government as an enabler, has actually helped business to thrive. These technological shifts encouraged Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's participation worldwide Cup state they are discovering the payment systems developed by regional 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 main platform used by companies operating in Nigeria.

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

He stated NairaBET, the nation's 2nd greatest wagering company, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was included in late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley's Y-Combinator programme.

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 mad Ikeja district of Lagos, said the number of month-to-month 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 development.

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

Paystack stated it makes it possible for payments for a number of wagering companies however also a wide variety of businesses, from energy services to transport companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 accompanied the arrival of foreign financiers intending to use sports betting wagering.

Industry specialists state the sector produces about $1 billion a year and is most 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 established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, cost of running shops and ability for consumers to prevent the preconception of gaming in public indicated online deals would grow.
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But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least because lots of clients still remain unwilling to spend online.

He said the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering shops typically serve as social hubs where customers can see soccer complimentary of charge while placing bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's last warm up game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He said he started gambling three months earlier and bets up to 1,000 naira a day.

"Since I have actually been playing I have actually 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