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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology companies that are starting to make online services more practical.
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For several years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have cultivated a culture of cashless payments.
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Fear of electronic scams and slow web speeds have actually held Nigerian online customers back but wagering firms states the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online deals.

"We have seen considerable development in the variety of payment options that are offered. All that is definitely altering the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is much faster, whoever can connect to their platform with less issues and glitches," he said, 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 Settlement 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 first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing mobile phone use and falling information costs, Nigeria has actually long been viewed as a terrific chance for online businesses - once customers feel comfortable with electronic payments.

Online gambling firms state that is happening, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

British online sports betting firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced 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.
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"The growth in the number of fintechs, and the government as an enabler, has assisted the organization to thrive. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation in the World Cup say they are finding the payment systems developed by local start-ups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the main platform used by organizations running in Nigeria.

"We added Paystack as one of our payment options without any excitement, without announcing to our customers, and within a month it soared to the number one most used payment choice on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's second greatest wagering firm, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice given that it was added in late 2017.

Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from investors 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 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 sites. "We have seen a growth in that neighborhood and they have actually brought us along," said Quartey.

Paystack said it allows payments for a number of wagering firms but likewise a large range of businesses, from energy services to transfer business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner 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 in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have accompanied the arrival of foreign investors wanting to use sports betting.
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Industry professionals state the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more established.

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 half stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi said its sales were split between shops and online but the ease of electronic payments, cost of running stores and capability for consumers to prevent the preconception of gaming in public implied online transactions would grow.
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But despite 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 numerous customers still remain hesitant to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering shops often serve as social centers where consumers can see soccer free of charge while positioning bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to see Nigeria's last heat up video game before the World Cup.

Richard Onuka, a who makes 25,000 naira a month, was fixated on a television screen inside. He said he began sports betting 3 months earlier and bets up to 1,000 naira a day.

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