By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation firms that are starting to make online companies more practical.
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For several years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have actually cultivated a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have held Nigerian online consumers back but sports betting firms states the new, quick digital payment systems underpinning their websites are changing mindsets towards online deals.

"We have seen significant development in the variety of payment services that are readily available. All that is certainly changing the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is much faster, whoever can connect to their platform with less concerns and glitches," he stated, including that taxes from sports betting in Lagos State rose 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 reserve bank and licensed 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 almost 190 million, increasing mobile phone usage and falling information expenses, Nigeria has actually long been viewed as a fantastic chance for online businesses - once consumers feel comfortable with electronic payments.

Online gaming companies say that is happening, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online retailers.

British online wagering firm Betway opened its very first African organization 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 supervisor Lere Awokoya stated.

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

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's participation worldwide Cup say they are discovering the payment systems created by regional startups such as Paystack are showing popular online.

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

"We added Paystack as one of our payment alternatives without any fanfare, without revealing to our consumers, and within a month it soared to the top most pre-owned payment option on the website," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's second most significant wagering firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option because it was added in late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase financing 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.

Paystack, based in the mad Ikeja district of Lagos, stated the number of regular monthly transactions 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 said an ecosystem of developers had actually emerged around Paystack, producing software to incorporate the platform into websites. "We have actually seen a growth in that neighborhood and they have actually brought us along," said Quartey.

Paystack said it makes it possible for payments for a variety of sports betting firms but likewise a vast array of organizations, from utility services to carry 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 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 take advantage of sports betting.

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

Russia's 1XBet and Slovakia's DOXXbet have 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 company introduced in 2015.
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NairaBET's Alabi stated its sales were split in between stores and online but the ease of electronic payments, expense of running stores and ability for customers to prevent the stigma of sports betting in public implied online deals would grow.

But regardless of advances in payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was crucial to have a store network, not least because many consumers still stay hesitant to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian sports betting stores frequently act as social hubs where clients can watch soccer totally free of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to see Nigeria's final warm up video game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he began sports betting three months earlier and bets as much as 1,000 naira a day.

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