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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation companies that are starting to make online companies more viable.
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For many years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have fostered a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online consumers back however wagering firms states the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online deals.
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"We have seen substantial growth in the variety of payment services that are offered. All that is certainly altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will go with whoever is faster, whoever can connect to their platform with less concerns and problems," he said, including that taxes from in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
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That development has been matched by an increase 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 an overall 132 billion naira ($420 million). Transactions leapt 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 cellphone usage and falling data costs, Nigeria has long been viewed as a terrific chance for online businesses - once customers feel comfy with electronic payments.

Online gaming firms say that is occurring, though reaching the tens of countless Nigerians without access to banking services remains an obstacle for pure online sellers.

British online sports betting firm Betway opened its very first African business 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 growth in the number of fintechs, and the federal government as an enabler, has assisted the company to prosper. These technological shifts motivated Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION

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

Paystack and another regional startup Flutterwave, both founded in 2016, are offering competition for Nigeria's Interswitch which was set up in 2002 and was the main platform used by organizations running in Nigeria.

"We added Paystack as one of our payment options without any fanfare, without revealing to our customers, and within a month it shot up to the number one most pre-owned payment alternative on the website," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's second most significant wagering company, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option given that it was included late 2017.

Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from investors consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, stated the variety of regular monthly transactions it processed rose 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," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack stated it makes it possible for payments for a number of sports betting companies but also a vast array of organizations, from energy services to carry companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with 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 coincided with the arrival of foreign financiers wishing to tap into sports betting wagering.

Industry experts say 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 developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company launched in 2015.

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

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

He said the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering shops typically function as social hubs where clients can enjoy soccer totally free of charge while positioning bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he began sports betting 3 months back and bets as much as 1,000 naira a day.

"Since I have actually 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; modifying by David Clarke)