By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation firms that are beginning to make online services more feasible.

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

Fear of electronic scams and slow internet speeds have actually held Nigerian online consumers back however wagering companies states the new, quick digital payment systems underpinning their sites are changing mindsets towards online deals.
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"We have seen significant development in the variety of payment services that are offered. All that is absolutely altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will opt for whoever is quicker, whoever can link to their platform with less issues and problems," he said, 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 an increase in web payments, according to information 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 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 smart phone use and falling information expenses, Nigeria has long been seen as an excellent opportunity for online businesses - once customers feel comfortable with electronic payments.

Online gambling firms say that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online sellers.

British online sports betting firm Betway opened its very first African organization 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 supervisor Lere Awokoya said.

"The growth in the number of fintechs, and the federal government as an enabler, has helped the business to flourish. These technological shifts motivated Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria's participation worldwide Cup say they are discovering the payment systems produced by regional startups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are offering competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by organizations operating in .

"We added Paystack as one of our payment options without any fanfare, without announcing to our customers, and within a month it soared to the primary most pre-owned payment alternative on the website," said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second most significant sports betting firm, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was added in late 2017.

Paystack was established by two Nigerian computer technology 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 financiers consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the number of monthly 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 single month," said Emmanuel Quartey, Paystack's head of development.

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

Paystack said it allows payments for a variety of sports betting companies but also a wide variety of companies, from utility services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
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FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually coincided with the arrival of foreign investors wishing to take advantage of sports betting wagering.

Industry professionals say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where business is more established.
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Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split between stores and online but the ease of electronic payments, expense of running shops and capability for consumers 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 very important to have a store network, not least because many customers still remain hesitant to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering stores often serve as social centers where consumers can view soccer free of charge while positioning bets.
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At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's last heat up video game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He said he started gambling three months ago and bets as much as 1,000 naira a day.

"Since I have been playing I have 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