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 innovation companies that are beginning to make online companies more practical.
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For 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 promoted a culture of cashless payments.

Fear of electronic scams and sluggish internet speeds have held Nigerian online customers back but wagering companies states the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online transactions.

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

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

That growth 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 main 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising smart phone usage and falling information costs, Nigeria has actually long been seen as a fantastic chance for online companies - once consumers feel comfy with electronic payments.

Online gaming companies state that is happening, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online sellers.

British online wagering company Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced 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 number of fintechs, and the government as an enabler, has helped business to grow. These technological shifts encouraged Betway to begin operating in Nigeria," he stated.
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FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria's participation worldwide Cup say they are discovering the payment systems developed by local start-ups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the primary platform used by businesses running in Nigeria.

"We added Paystack as one of our payment options without any excitement, without revealing to our clients, and within a month it soared to the primary most used payment choice on the website," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's 2nd greatest sports betting company, now had 2 million routine consumers on its website, up from 500,000 in 2013, and stayed 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 financiers including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, said the variety of monthly 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," said Emmanuel Quartey, Paystack's head of development.

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

Paystack stated it allows payments for a variety of sports betting firms however also a vast array of services, from utility services to transfer companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program along with 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 corresponded with the arrival of foreign investors wanting to take advantage of sports betting.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last two years while Italy's Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi said its sales were divided in between stores and online but the ease of electronic payments, cost of running stores and ability for clients to prevent the preconception of gaming in public meant online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a store network, not least since many consumers still remain unwilling to invest online.

He said the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering stores often function as social centers where consumers can see soccer totally free of charge while placing bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to see Nigeria's last heat up game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He said he started gambling 3 months ago and bets as much as 1,000 naira a day.

"Since I have been playing I have not won anything but I believe that one day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)
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