By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mostly thanks to payment systems established by homegrown technology companies that are starting to make online organizations more practical.

For many years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have fostered a culture of cashless payments.

Fear of electronic scams and sluggish internet speeds have actually held Nigerian online customers back however sports betting companies states the brand-new, quick digital payment systems underpinning their sites are towards online transactions.

"We have seen substantial growth in the variety of payment solutions that are offered. All that is absolutely changing the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will go with whoever is much faster, whoever can connect to their platform with less problems 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 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 certified 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 first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, rising cellphone usage and falling data expenses, Nigeria has long been viewed as a great chance for online businesses - once consumers feel comfy with electronic payments.
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Online gambling firms say that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays an obstacle for pure online merchants.

British online wagering company Betway opened its first African business 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 market is going," Betway's Nigeria manager Lere Awokoya said.

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

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's involvement worldwide Cup say they are discovering the payment systems created by local start-ups such as Paystack are proving popular online.
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Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by companies operating in Nigeria.

"We added Paystack as one of our payment choices without any excitement, without announcing to our clients, and within a month it shot up to the number one most used payment alternative on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's 2nd biggest sports betting firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was included late 2017.

Paystack was established by two Nigerian computer system science 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 investors including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, said the number of month-to-month deals 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," stated Emmanuel Quartey, Paystack's head of development.

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

Paystack stated it enables payments for a number of wagering companies but likewise a wide range of companies, from energy services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as endeavor capitalists 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 corresponded with the arrival of foreign investors wanting to take advantage of sports betting.
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Industry experts say the sector produces about $1 billion a year and is 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 pattern, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi stated its sales were divided in between stores and online however the ease of electronic payments, expense of running shops and ability for customers to avoid the stigma of gambling in public indicated online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least because lots of consumers still stay unwilling to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores frequently act as social hubs where consumers can enjoy soccer free of charge while positioning bets.
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At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans collected to view Nigeria's last heat up video game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a TV screen inside. He stated he began sports betting three months ago and bets as much as 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," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos