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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown innovation firms that are beginning to make online organizations more feasible.
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For years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have promoted a culture of cashless payments.

Fear of electronic scams and slow web speeds have actually held Nigerian online consumers back but sports betting firms says the brand-new, fast digital payment systems underpinning their sites are changing mindsets towards online deals.

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

"The operators will choose whoever is faster, whoever can connect to their platform with less concerns and problems," he said, including 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 main bank and certified banks.

In 2016, there were 14 million web payments worth a total 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone use and falling information expenses, Nigeria has actually long been seen as a fantastic opportunity for online companies - once consumers feel comfy with electronic payments.

Online gambling companies state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays a difficulty for pure online merchants.

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

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

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

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's participation in the World Cup say they are finding the payment systems created by regional start-ups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment choices with no excitement, without revealing to our clients, and within a month it shot up to the top most pre-owned payment alternative on the site," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's 2nd greatest wagering company, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was included late 2017.

Paystack was set up by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got 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, stated the number of regular monthly deals 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 stated an environment of developers had emerged around Paystack, producing software to integrate the platform into websites. "We have actually seen a development in that community and they have actually brought us along," stated Quartey.

Paystack stated it enables payments for a variety of sports betting firms but likewise a vast array of organizations, from energy services to transfer business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as 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 actually corresponded with the arrival of foreign investors intending to tap into sports betting wagering.

Industry professionals say 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 2 years while Italy's Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, cost of running shops and capability for clients to avoid the stigma of sports betting 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 necessary to have a store network, not least because lots of consumers still remain hesitant to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering stores typically serve as social hubs where consumers 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.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He stated he began 3 months back and bets approximately 1,000 naira a day.

"Since I have been playing I have actually not won anything however 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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