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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation firms that are beginning to make online businesses 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 cash transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and slow web speeds have actually held Nigerian online customers back but wagering firms says the new, fast digital payment systems underpinning their websites are altering attitudes towards online transactions.

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

"The operators will opt for whoever is quicker, whoever can connect to their platform with less issues and glitches," he said, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development has been matched by a rise in web payments, according to data 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 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 almost 10 million worth 61 billion.

With a young population of almost 190 million, rising mobile phone usage and falling data expenses, Nigeria has long been seen as an excellent opportunity for online organizations - once customers feel comfortable with electronic payments.

Online gaming companies say that is happening, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online merchants.

British online wagering company Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.
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"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya said.

"The development in the number of fintechs, and the government as an enabler, has assisted the service to flourish. These technological shifts encouraged Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's involvement worldwide Cup say they are discovering the payment systems created by local startups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are offering competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by businesses running in Nigeria.

"We included Paystack as one of our payment choices without any excitement, without announcing to our consumers, and within a month it soared to the number one most pre-owned payment alternative on the website," said Akin Alabi, creator of NairabBET.
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He stated NairaBET, the nation's second greatest wagering firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice because it was added in late 2017.

Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got 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 frenetic Ikeja district of Lagos, said the number of month-to-month deals 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 each and every single month," said Emmanuel Quartey, Paystack's head of development.

He stated a community of developers had actually emerged around Paystack, producing software to incorporate the platform into sites. "We have seen a growth in that neighborhood and they have actually brought us along," stated Quartey.

Paystack said it makes it possible for payments for a number of sports betting firms but likewise a wide variety of organizations, from utility services to carry companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
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FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have accompanied the arrival of foreign investors hoping to use sports betting wagering.

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

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 firm introduced in 2015.

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

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least because numerous consumers still stay reluctant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops frequently act as social hubs where customers can enjoy soccer complimentary of charge while placing bets.

At a deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria's final warm up video game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He said he began gambling three months ago and bets as much as 1,000 naira a day.

"Since I have actually been playing I have 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)