By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown innovation companies that are beginning to make online organizations more feasible.

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

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

"We have actually seen substantial growth in the number of payment options that are offered. All that is absolutely altering the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will opt for whoever is quicker, whoever can connect to their platform with less concerns and glitches," he said, adding that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

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

With a young population of almost 190 million, increasing mobile phone usage and falling data expenses, Nigeria has long been viewed as a fantastic chance for online services - once consumers feel comfortable with electronic payments.
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Online sports betting firms say that is occurring, though reaching the 10s of millions of Nigerians without access to banking services remains an obstacle for pure online sellers.

British online sports betting firm Betway opened its very first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.
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"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya said.

"The development in the variety of fintechs, and the federal government as an enabler, has helped business to prosper. These technological shifts motivated Betway to begin running in Nigeria," he said.

FINTECH COMPETITION
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sports betting firms cashing in on the soccer frenzy worked up by Nigeria's participation worldwide Cup say they are discovering the payment systems developed by regional startups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both established in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by companies running in Nigeria.

"We added Paystack as one of our payment options with no excitement, without announcing to our consumers, and within a month it soared to the top most used payment choice on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second greatest wagering firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was 2017.

Paystack was set up by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator programme.
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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 month-to-month transactions 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 every single month," said Emmanuel Quartey, Paystack's head of growth.
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He said an ecosystem of developers had actually emerged around Paystack, developing software to integrate the platform into sites. "We have seen a growth because neighborhood and they have actually brought us along," stated Quartey.

Paystack stated it enables payments for a variety of sports betting companies however also a vast array of companies, from utility services to transfer companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program along with venture capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.

FOREIGN INVESTMENT

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

Industry experts say 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 both set up 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 company introduced in 2015.

NairaBET's Alabi stated its sales were split in between shops and online however the ease of electronic payments, expense of running stores and ability for customers to prevent the stigma of gambling in public implied online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a shop network, not least since numerous clients still remain reluctant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops often act as social centers where clients can see soccer totally free of charge while putting bets.
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At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's last heat up game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a television screen inside. He said he started gambling 3 months back and bets as much as 1,000 naira a day.

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