By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are beginning to make online businesses more practical.

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 cash transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have online consumers back however wagering firms states the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

"We have seen substantial development in the variety of payment services that are offered. All that is definitely altering the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will opt for whoever is much faster, whoever can connect to their platform with less issues and glitches," he stated, 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 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.

With a young population of nearly 190 million, increasing smart phone use and falling data expenses, Nigeria has actually long been seen as a fantastic chance for online businesses - once customers feel comfortable with electronic payments.

Online gambling firms state that is occurring, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online retailers.
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British online sports betting company Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 stated.

"The development in the number of fintechs, and the government as an enabler, has assisted the company to grow. These technological shifts encouraged Betway to start operating in Nigeria," he said.
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FINTECH COMPETITION

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

Paystack and another regional startup Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the main platform used by services operating in Nigeria.

"We added Paystack as one of our payment options without any excitement, without announcing to our clients, and within a month it shot up to the top most used payment option on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's second biggest sports betting company, now had 2 million routine clients 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 established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage 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.
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Paystack, based in the frenetic Ikeja district of Lagos, said 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," stated Emmanuel Quartey, Paystack's head of development.

He stated an ecosystem of developers had emerged around Paystack, developing software application to incorporate the platform into sites. "We have seen a development in that community and they have actually brought us along," said Quartey.

Paystack stated it makes it possible for payments for a variety of wagering companies but likewise a large range of businesses, from energy services to transfer business to insurance provider Axa Mansard.
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Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme in addition to venture 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 accompanied the arrival of foreign financiers wishing to tap into sports betting.

Industry experts state the sector generates 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 both established in Nigeria in the last 2 years while Italy's Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

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

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was crucial to have a store network, not least because numerous clients still stay unwilling to invest online.

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

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to watch Nigeria's final heat up video game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He stated he started sports betting three months back and bets as much as 1,000 naira a day.

"Since I have been playing I have 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