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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology companies that are beginning to make online services more practical.
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For years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have actually promoted a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have held Nigerian online customers back however wagering firms states the new, fast digital payment systems underpinning their sites are altering mindsets towards online deals.

"We have seen significant development in the number of payment services that are readily available. All that is certainly altering the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is faster, whoever can connect to their platform with less problems and problems," he stated, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has 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 licensed 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, rising smart phone usage and falling data costs, Nigeria has long been seen as a fantastic chance for online organizations - once customers feel comfy with electronic payments.

Online gaming companies say that is taking place, though reaching the 10s of millions of Nigerians without access to banking services remains a challenge for pure online retailers.

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

"There is a steady shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya stated.

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

FINTECH COMPETITION
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sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's participation on the planet Cup state they are discovering the payment systems produced by local startups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by companies operating in Nigeria.

"We included Paystack as one of our payment options without any fanfare, without announcing to our consumers, and within a month it soared to the top most pre-owned payment option on the website," stated Akin Alabi, founder of NairabBET.

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

Paystack was established by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley's Y-Combinator programme.

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 regular monthly 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 every single month," stated Emmanuel Quartey, Paystack's head of development.

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

Paystack stated it allows payments for a variety of sports betting companies however likewise a large range of services, from energy services to transport business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme 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 actually coincided with the arrival of foreign financiers wanting to take advantage of sports betting.

Industry experts say the sector creates 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 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 stated its sales were split between shops and online but the ease of electronic payments, expense of running shops and capability for customers to prevent the stigma of sports betting in public suggested online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least due to the fact that lots of clients still remain unwilling to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering shops frequently function as social hubs where customers can see free of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria's last heat up game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a TV screen inside. He stated he started sports betting 3 months ago and bets as much as 1,000 naira a day.

"Since I have been playing I have 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