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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 innovation firms that are beginning to make online companies more practical.
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For years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and slow web speeds have actually held Nigerian online consumers back but wagering firms says the new, quick digital payment systems underpinning their sites are altering attitudes towards online deals.

"We have seen considerable growth in the number of payment services that are offered. All that is absolutely changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is faster, whoever can connect to their platform with less concerns and glitches," he said, adding that taxes from sports betting wagering in Lagos State rose 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 central bank and certified banks.

In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions jumped 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 mobile phone use and falling information expenses, Nigeria has actually long been viewed as a great chance for online businesses - once customers feel comfortable with electronic payments.

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

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

"There is a gradual shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.

"The growth in the number of fintechs, and the federal government as an enabler, has assisted the service to grow. These technological shifts motivated Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

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

Paystack and another regional start-up Flutterwave, both established 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.

"We included Paystack as one of our payment alternatives without any fanfare, without revealing to our consumers, and within a month it soared to the primary most used payment option on the site," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second greatest sports betting company, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice considering that it was included in late 2017.

Paystack was set up by two 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 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 monthly transactions it processed increased 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 designers had emerged around Paystack, creating software to incorporate the platform into sites. "We have actually seen a growth because neighborhood and they have actually carried us along," stated Quartey.

Paystack said it makes it possible for payments for a variety of wagering firms but likewise a wide variety of organizations, from utility services to transfer business to insurance company Axa Mansard.

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

Industry experts state the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the business is more established.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi said its sales were divided between shops and online but the ease of electronic payments, expense of running shops and capability for clients to avoid the preconception of sports betting in public suggested online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least since lots of consumers still remain reluctant to invest online.

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

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to see Nigeria's last heat up game before the World Cup.
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Richard Onuka, a who makes 25,000 naira a month, was fixated on a television screen inside. He stated he began gambling 3 months earlier and bets as much as 1,000 naira a day.

"Since I have been playing I have actually 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