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By Alexis Akwagyiram and Didi Akinyelure

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

For many years, mobile payments stopped working to remove 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 sluggish internet speeds have actually held Nigerian online customers back but wagering firms says the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.
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"We have actually seen significant development in the variety of payment options that are available. All that is certainly changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.
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"The operators will go with whoever is faster, whoever can connect to their platform with less problems and problems," he stated, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
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That development 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 licensed banks.
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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 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 expenses, Nigeria has actually long been viewed as a great opportunity for online organizations - once customers feel comfortable with electronic payments.

Online sports betting firms state that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays a difficulty for pure online retailers.

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

"There is a steady shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

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

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's involvement on the planet Cup state they are discovering the payment systems created by regional start-ups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by services running in Nigeria.

"We added Paystack as one of our payment choices with no excitement, without revealing to our clients, and within a month it soared to the top most secondhand payment alternative on the website," said Akin Alabi, creator of NairabBET.

He said NairaBET, the country's 2nd greatest wagering company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was included in late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got 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, stated the variety of regular monthly deals it processed increased from about 8,000 in early 2016 to more than 900,000 as of June 2018.

"In early 2016 we were processing about $3,000 a month. Today we process well over $11 million each and every single month," said Emmanuel Quartey, Paystack's head of development.

He stated an ecosystem of designers had emerged around Paystack, developing software to incorporate the platform into websites. "We have seen a growth because community and they have actually brought us along," stated Quartey.

Paystack said it allows payments for a number of wagering companies but likewise a vast array of companies, from energy services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as endeavor capitalists 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 corresponded with the arrival of foreign investors hoping to use sports betting wagering.

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 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.

stated its sales were split between shops and online but the ease of electronic payments, expense of running stores and ability for clients to prevent the stigma of sports betting in public implied online transactions would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least because many customers still stay hesitant to invest online.

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

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to watch Nigeria's last heat up 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 TV screen inside. He said he began gambling three months ago and bets up to 1,000 naira a day.

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