By Alexis Akwagyiram and Didi Akinyelure

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

For 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 sluggish web speeds have actually held Nigerian online customers back but sports betting firms states the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards .

"We have seen considerable growth in the variety of payment solutions that are available. All that is absolutely altering the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will opt for whoever is much faster, whoever can connect to their platform with less problems 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 actually been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed banks.
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In 2016, there were 14 million web payments worth an overall 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, increasing smart phone use and falling data expenses, Nigeria has actually long been seen as a terrific chance for online services - once consumers feel comfortable with electronic payments.
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Online gaming companies state that is occurring, though reaching the tens of millions of Nigerians without access to banking services remains an obstacle for pure online sellers.

British online wagering 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.

"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 government as an enabler, has helped the company to flourish. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's involvement in the World Cup say they are discovering the payment systems created by regional startups such as Paystack are proving popular online.

Paystack and another regional startup 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 operating in Nigeria.

"We included Paystack as one of our payment alternatives without any excitement, without revealing to our consumers, and within a month it soared to the top most used payment alternative on the site," said Akin Alabi, founder of NairabBET.
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He said NairaBET, the nation's 2nd greatest sports betting firm, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was included late 2017.

Paystack was established by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from financiers including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, stated the number of regular monthly transactions 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 growth.
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He stated an environment of developers had actually emerged around Paystack, producing software to integrate the platform into sites. "We have seen a growth because community and they have actually carried us along," said Quartey.

Paystack stated it allows payments for a variety of sports betting firms but likewise a large range of businesses, from utility services to transfer companies to insurance company Axa Mansard.
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Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as investor 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 accompanied the arrival of foreign financiers intending to take advantage of sports betting wagering.

Industry experts 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 developed.

Russia's 1XBet and Slovakia's DOXXbet have 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 company introduced in 2015.

NairaBET's Alabi said its sales were split in between shops and online but the ease of electronic payments, cost of running shops and capability for customers to prevent the stigma of sports betting in public suggested online deals would grow.

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

He stated the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting stores frequently serve as social centers where consumers can view soccer free of charge while placing bets.
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At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to watch Nigeria's final 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 began sports betting 3 months ago and bets up to 1,000 naira a day.

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