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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are starting to make online businesses more feasible.
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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 cash transfers have actually cultivated a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have actually held Nigerian online consumers back but wagering companies states the new, quick digital payment systems underpinning their sites are changing attitudes towards online transactions.

"We have seen substantial development in the number of payment services that are readily available. All that is certainly changing the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is much faster, whoever can connect to their platform with less concerns and problems," he stated, adding 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 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 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 almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone usage and falling data costs, Nigeria has long been seen as a terrific chance for online companies - once customers feel comfy with electronic payments.

Online gambling firms state that is taking place, though reaching the 10s of millions of Nigerians without access to banking services remains a challenge for pure online merchants.

British online wagering firm Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya said.

"The growth in the variety of fintechs, and the government as an enabler, has actually assisted business to thrive. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's involvement on the planet Cup say they are discovering the payment systems produced by regional start-ups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are offering competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by in Nigeria.
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"We added Paystack as one of our payment choices with no excitement, without revealing to our consumers, and within a month it soared to the top most secondhand payment choice on the website," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second most significant wagering firm, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice since it was included late 2017.

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 programme.

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, said the number 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.
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He stated an ecosystem of designers had emerged around Paystack, producing software to integrate the platform into sites. "We have seen a growth in that neighborhood and they have actually carried us along," stated Quartey.

Paystack said it allows payments for a number of wagering firms however also a wide variety of organizations, from utility services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program in addition to 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 actually accompanied the arrival of foreign investors wishing to use sports betting.
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Industry specialists 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 established.

Russia's 1XBet and Slovakia's DOXXbet have actually 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 firm released in 2015.

NairaBET's Alabi said its sales were divided between stores and online however the ease of electronic payments, cost of running stores and capability for customers to avoid the preconception of sports betting in public suggested online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was important to have a store network, not least since many clients still stay hesitant to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering stores frequently function as social hubs where customers can watch soccer free of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's final warm up video game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a television screen inside. He stated he began sports betting 3 months ago and bets approximately 1,000 naira a day.

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