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By Alexis Akwagyiram and Didi Akinyelure

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

For many years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have fostered a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have actually held Nigerian online consumers back however sports betting companies states the brand-new, quick digital payment systems underpinning their sites are altering mindsets towards online deals.

"We have seen substantial development in the number of payment solutions that are available. All that is definitely changing the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.
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"The operators will opt for whoever is faster, whoever can link to their platform with less concerns and problems," he stated, adding that taxes from sports betting 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 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 an overall 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 nearly 190 million, rising smart phone use and falling information expenses, Nigeria has actually long been seen as a terrific chance for online companies - once customers feel comfortable with electronic payments.

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

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

"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya said.
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"The growth in the variety of fintechs, and the government as an enabler, has actually helped the business to prosper. These technological shifts motivated Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's participation worldwide Cup state they are discovering the payment systems created by local startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both in 2016, are offering competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by organizations running in Nigeria.

"We added Paystack as one of our payment options without any fanfare, without revealing to our customers, and within a month it shot up to the number one most used payment choice on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country's second biggest sports betting company, now had 2 million routine clients 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 two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from financiers including China's Tencent and Comcast Ventures in the United States.
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Paystack, based in the mad Ikeja district of Lagos, said the number of regular monthly deals it processed increased 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 growth.
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He stated a community of designers had emerged around Paystack, producing software to incorporate the platform into websites. "We have seen a development in that neighborhood and they have carried us along," said Quartey.

Paystack stated it makes it possible for payments for a number of sports betting firms however likewise a wide variety of companies, from energy services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.

FOREIGN INVESTMENT

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

Industry professionals say the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the business is more developed.
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Russia's 1XBet and Slovakia's DOXXbet have actually both set up 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 launched in 2015.

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

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was important to have a shop network, not least because many clients still stay unwilling to invest online.
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He stated the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting shops typically function as social hubs where consumers can watch soccer complimentary of charge while positioning bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He stated he started gambling 3 months earlier and bets as much as 1,000 naira a day.

"Since I have actually been playing I have actually not won anything but I believe that a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)