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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation companies that are starting to make online businesses more viable.
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For many years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have 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 actually seen considerable growth in the variety of payment services that are available. All that is definitely altering the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

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

That growth has been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and licensed banks.

In 2016, there were 14 million web payments worth a total 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 almost 190 million, rising mobile phone usage and falling information expenses, Nigeria has actually long been viewed as a great chance for online organizations - once consumers feel comfy with electronic payments.

Online gambling firms say that is taking place, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online sellers.

British online sports betting company Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and . It introduced in Nigeria in January.

"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 actually helped the service to thrive. These technological shifts motivated Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze worked up by Nigeria's involvement in the World Cup say they are finding the payment systems developed by local start-ups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by services 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 secondhand payment option on the website," said Akin Alabi, creator of NairabBET.

He said NairaBET, the country's second most significant wagering firm, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was added in late 2017.
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Paystack was established by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early phase financing 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, said the variety of monthly transactions it processed rose 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 growth.

He stated an ecosystem of designers had emerged around Paystack, producing software application to integrate the platform into websites. "We have seen a development in that community and they have actually brought us along," said Quartey.

Paystack said it allows payments for a variety of wagering firms however likewise a large range of businesses, from utility services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise 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 actually accompanied the arrival of foreign financiers intending to use sports betting wagering.

Industry professionals say the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the business is more developed.

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

NairaBET's Alabi said its sales were split between shops and online however the ease of electronic payments, expense of running shops and ability for clients to prevent the stigma of gambling in public meant online deals would grow.

But despite 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 many clients still stay unwilling to invest online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering shops typically function as social centers where clients can watch soccer complimentary of charge while positioning bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to watch Nigeria's last heat up game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a television screen inside. He said he started sports betting 3 months back and bets approximately 1,000 naira a day.

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