By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation companies that are beginning to make online companies 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 cultivated a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have held Nigerian online customers back but wagering companies states the new, fast digital payment systems underpinning their sites are changing attitudes towards online transactions.
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"We have seen substantial growth in the variety of payment options that are offered. All that is definitely changing the video gaming area," said 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 problems and problems," he stated, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

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

In 2016, there were 14 million web payments worth a total 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 use and falling information costs, Nigeria has actually long been viewed as an excellent chance for online companies - once consumers feel comfy with electronic payments.

Online gaming companies state that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays an obstacle for pure online merchants.
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British online sports betting company Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.
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"There is a steady shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.

"The growth in the variety of fintechs, and the federal government as an enabler, has actually helped business to flourish. These technological shifts motivated Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria's participation worldwide Cup say they are finding the payment systems developed by local start-ups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the main platform used by services operating in Nigeria.
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"We added Paystack as one of our payment choices with no fanfare, without announcing to our customers, and within a month it soared to the primary most used payment alternative on the website," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's 2nd most significant wagering firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option given that it was included late 2017.

Paystack was established by 2 Nigerian computer technology 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 frenetic Ikeja district of Lagos, said the number of month-to-month 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," said Emmanuel Quartey, Paystack's head of development.

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

Paystack stated it makes it possible for payments for a variety of sports betting companies however likewise a large variety of organizations, from utility services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to 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 coincided with the arrival of foreign financiers hoping to tap into sports betting.

Industry specialists state the sector creates about $1 billion a year and is most 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 two years while Italy's Goldbet was ahead of 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 shops and online however the ease of electronic payments, expense of running shops and capability for consumers to prevent the preconception of in public indicated online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least due to the fact that numerous consumers still stay unwilling 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 stores frequently function as social hubs where consumers can enjoy soccer free of charge while putting bets.
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At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to watch Nigeria's last warm up game before the World Cup.

Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a television screen inside. He said he began gambling 3 months back and bets approximately 1,000 naira a day.

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