By Alexis Akwagyiram and Didi Akinyelure

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

For several 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 actually fostered a culture of cashless payments.
bet9ja.com
Fear of electronic scams and sluggish web speeds have held Nigerian online customers back but wagering companies says the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online deals.

"We have actually seen substantial development in the variety of payment services that are readily available. All that is absolutely changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.
bit.ly
"The operators will go with whoever is quicker, whoever can link to their platform with less problems and glitches," he stated, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has actually been matched by an increase in web payments, according to data 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 expenses, Nigeria has long been viewed as a fantastic chance for online companies - once consumers feel comfy with electronic payments.

Online gambling firms say that is occurring, though reaching the tens 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 company 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 variety of fintechs, and the government as an enabler, has actually helped the organization to thrive. These technological shifts encouraged Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms the soccer frenzy whipped up by Nigeria's participation in the World Cup state they are discovering the payment systems developed by regional start-ups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are offering competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by businesses operating in Nigeria.

"We added Paystack as one of our payment choices without any excitement, without revealing to our consumers, and within a month it soared to the top most used payment choice on the website," said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second most significant wagering company, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was added in late 2017.
bet9ja.com
Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding 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 frenetic Ikeja district of Lagos, stated the number of 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," said Emmanuel Quartey, Paystack's head of growth.
bet9ja.com
He said an environment of designers had emerged around Paystack, creating software application to incorporate the platform into sites. "We have actually seen a growth because neighborhood and they have actually carried us along," said Quartey.
bet9ja.com
Paystack said it makes it possible for payments for a number of sports betting companies but likewise a large range of services, from energy services to carry companies to insurance company 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have accompanied the arrival of foreign investors intending to take advantage of sports betting wagering.

Industry experts 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 established.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split between shops and online but the ease of electronic payments, cost of running shops and ability for clients to avoid the preconception of gambling in public suggested online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was important to have a shop network, not least due to the fact that numerous clients still stay hesitant to invest online.

He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering shops typically act as social centers where consumers can view soccer free of charge while positioning bets.
bit.ly
At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to enjoy Nigeria's last heat up game before the World Cup.

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