By Alexis Akwagyiram and Didi Akinyelure

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

For many 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 cultivated a culture of cashless payments.

Fear of electronic scams and slow web speeds have held Nigerian online customers back but sports betting companies states the new, quick digital payment systems underpinning their sites are altering mindsets towards online deals.
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"We have seen substantial growth in the variety of payment options that are offered. All that is definitely altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, 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 problems," he said, including that taxes from sports betting in Lagos State increased 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 reserve 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, increasing cellphone usage and falling information costs, Nigeria has long been seen as a great opportunity for online organizations - once customers feel comfortable with electronic payments.

Online gaming companies state that is happening, though reaching the 10s of millions of Nigerians without access to banking services remains an obstacle for pure online merchants.

British online sports betting firm 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 said.

"The growth in the variety of fintechs, and the government as an enabler, has actually helped the organization to thrive. These technological shifts encouraged Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms capitalizing the worked up by Nigeria's involvement on the planet Cup say they are finding the payment systems created by regional startups such as Paystack are proving popular online.

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

"We added Paystack as one of our payment options without any fanfare, without announcing to our consumers, and within a month it shot up to the number one most pre-owned payment option on the site," said Akin Alabi, creator of NairabBET.
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He stated NairaBET, the country's second biggest sports betting firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice since it was added in late 2017.
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Paystack was set up by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from financiers consisting of 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 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 every single month," said Emmanuel Quartey, Paystack's head of development.

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

Paystack stated it enables payments for a variety of wagering companies however likewise a vast array of companies, from energy services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have corresponded with the arrival of foreign investors intending to use sports betting wagering.

Industry specialists state the sector produces 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 two years while Italy's Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi said its sales were split between stores and online however the ease of electronic payments, cost of running stores and ability for customers to avoid the stigma of gambling in public implied online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least because lots of consumers still stay unwilling to invest online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering shops frequently function as social centers where consumers can see soccer free of charge while putting bets.

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

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a TV screen inside. He said he began sports betting 3 months earlier and bets approximately 1,000 naira a day.

"Since I have actually been playing I have not won anything but I think that a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)