By Alexis Akwagyiram and Didi Akinyelure
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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 companies more viable.

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

Fear of electronic scams and sluggish internet speeds have actually held Nigerian online consumers back but wagering companies says the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.

"We have seen significant growth in the number of payment services that are available. All that is definitely altering the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is much faster, whoever can connect to their platform with less problems and problems," he said, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth has been matched by a rise in web payments, according to data 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 jumped to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were nearly 10 million worth 61 billion.
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With a young population of nearly 190 million, rising smart phone use and falling information expenses, Nigeria has long been seen as a fantastic chance for online services - once consumers feel comfortable with electronic payments.

Online gaming firms state that is happening, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online sellers.

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 gradual shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya said.

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

sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's participation on the planet Cup state they are discovering the payment systems developed by regional startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by businesses running in Nigeria.

"We included Paystack as one of our payment alternatives with no excitement, without revealing to our consumers, and within a month it shot up to the primary most secondhand payment choice on the website," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second most significant wagering company, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative since it was added in late 2017.

Paystack was set up by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator programme.

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 frenetic Ikeja district of Lagos, stated the variety 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 growth.

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

Paystack stated it allows payments for a variety of sports betting firms however also a large range of organizations, from energy services to carry 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
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Shifts in Nigeria's payment culture have accompanied the arrival of foreign financiers hoping to use sports betting.

Industry specialists say the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the organization is more established.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of 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 however the ease of electronic payments, cost of running shops and ability for customers to avoid the preconception of gaming in public indicated online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least because many clients still remain reluctant to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering stores frequently function as social hubs where clients 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 gathered to view Nigeria's final heat up video game before the World Cup.

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

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