By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic scams and slow web speeds have held Nigerian online consumers back but wagering companies states the brand-new, quick digital payment systems underpinning their sites are altering attitudes towards online deals.

"We have actually seen substantial development in the number of payment options that are readily available. All that is absolutely changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

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

That development has actually been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing mobile phone use and falling data expenses, Nigeria has actually long been seen as a great opportunity for online services - once customers feel comfy with electronic payments.
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Online gaming companies state that is happening, though reaching the tens of countless Nigerians without access to banking services stays a difficulty for pure online retailers.

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

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

"The development in the variety of fintechs, and the government as an enabler, has assisted the business to grow. These technological shifts motivated Betway to start running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria's involvement on the planet Cup say they are finding the payment systems developed by local startups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by services running in Nigeria.

"We included Paystack as one of our payment alternatives without any fanfare, without revealing to our consumers, and within a month it shot up to the top most secondhand payment option on the website," said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second greatest sports betting company, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was added in late 2017.

Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley's Y-Combinator program.
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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 number of regular monthly deals 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 single month," stated Emmanuel Quartey, Paystack's head of growth.

He said a community of developers had actually emerged around Paystack, producing software application to integrate the platform into sites. "We have actually seen a development because neighborhood and they have actually carried us along," stated Quartey.

Paystack stated it enables payments for a number of sports betting companies however likewise a broad variety of businesses, from energy services to transfer companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also 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 coincided with the arrival of foreign investors wishing to take advantage of sports betting wagering.

Industry specialists state the sector generates 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 both set up in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi said its sales were divided between shops and online however the ease of electronic payments, cost of running stores and ability for clients to prevent the stigma of gambling in public implied online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a store network, not least due to the fact that numerous clients still remain reluctant to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering shops typically act as social centers where customers can watch soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans to enjoy Nigeria's final warm up game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He said he began sports betting three months earlier and bets approximately 1,000 naira a day.

"Since I have actually been playing I have 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