By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology firms that are starting to make online organizations more practical.

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

Fear of electronic scams and slow web speeds have held Nigerian online consumers back however wagering firms states the brand-new, quick digital payment systems underpinning their sites are altering attitudes towards online transactions.

"We have actually seen substantial development in the variety of payment solutions that are available. All that is definitely altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

"The operators will choose whoever is much faster, whoever can connect to their platform with less problems and glitches," he stated, including 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 System (NIBSS), which is owned by the main bank and licensed banks.

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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

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

Online gaming companies state that is occurring, 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 business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.
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"There is a progressive shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya said.

"The development in the variety of fintechs, and the government as an enabler, has actually assisted the company to prosper. These technological shifts motivated Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION
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sports betting companies capitalizing the soccer craze worked up by Nigeria's involvement in the World Cup state they are discovering the payment systems created by local start-ups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment options with no fanfare, without announcing to our customers, and within a month it soared to the number one most pre-owned payment option on the site," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second biggest sports betting company, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was added in late 2017.

Paystack was set up by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early phase 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 mad Ikeja district of Lagos, stated the variety of month-to-month 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," stated Emmanuel Quartey, Paystack's head of development.
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He stated a community of designers had emerged around Paystack, producing software application to incorporate the platform into websites. "We have seen a growth in that neighborhood and they have brought us along," stated Quartey.

Paystack stated it enables payments for a variety of sports betting companies but likewise a large range of businesses, from utility services to carry companies to insurance company Axa Mansard.
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Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program 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 actually accompanied the arrival of foreign financiers wishing to use sports betting.

Industry specialists 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 developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi stated its sales were split between stores and online but the ease of electronic payments, cost of running shops and capability for clients to prevent the stigma of sports betting in public suggested online transactions would grow.
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But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a shop network, not least due to the fact that lots of clients still remain hesitant to invest online.
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He said the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting shops typically act as social centers where clients can see soccer free of charge while putting bets.
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At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria's final warm up game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a TV screen inside. He said he started gambling 3 months earlier and bets approximately 1,000 naira a day.

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