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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology firms that are beginning to make online businesses more practical.
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For many years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have cultivated a culture of cashless payments.
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Fear of electronic scams and slow web speeds have actually held Nigerian online consumers back but wagering companies states the new, fast digital payment systems underpinning their sites are changing attitudes towards online transactions.

"We have actually seen substantial development in the number of payment options that are offered. All that is certainly altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is much faster, whoever can link to their platform with less concerns 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 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 central 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 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 expenses, Nigeria has long been viewed as an excellent chance for online organizations - once consumers feel comfy with electronic payments.
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Online gaming companies say that is taking place, though reaching the tens of countless Nigerians without access to banking services stays a difficulty for pure online merchants.

British online sports betting firm Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

"There is a gradual shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya said.

"The growth in the variety of fintechs, and the federal government as an enabler, has assisted the service to grow. These technological shifts motivated Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's involvement worldwide Cup state they are discovering the created by regional start-ups such as Paystack are showing popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by services running in Nigeria.

"We added Paystack as one of our payment alternatives with no excitement, without announcing to our clients, and within a month it soared to the number one most used payment choice on the site," stated Akin Alabi, creator of NairabBET.

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

Paystack was established by two Nigerian computer technology 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 financiers consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the number of regular monthly transactions 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.
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He stated an environment of developers had actually emerged around Paystack, developing software application to integrate the platform into websites. "We have actually seen a growth in that community and they have actually carried us along," stated Quartey.

Paystack said it allows payments for a number of sports betting companies however likewise a vast array of services, from utility services to transfer business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program 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 corresponded with the arrival of foreign financiers intending to take advantage of sports betting.

Industry experts state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the company is more developed.
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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 half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi said its sales were divided in between stores and online however the ease of electronic payments, expense of running shops and capability for consumers to avoid the stigma of gambling in public implied online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a shop network, not least since many customers still stay hesitant to spend online.

He said the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting shops typically function as social centers where clients can view soccer totally free of charge while placing bets.

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

Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a TV screen inside. He stated he began gambling three months back and bets up to 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," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos