By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are starting to make online businesses more viable.

For several 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 cultivated a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have held Nigerian online customers back however sports betting companies states the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.

"We have seen considerable growth in the number of payment options that are available. All that is absolutely changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will go with whoever is faster, whoever can link to their platform with less issues and glitches," he stated, including 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 an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone usage and falling data expenses, Nigeria has actually long been seen as a terrific chance for online companies - once consumers feel comfortable with electronic payments.
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Online gambling firms state that is happening, though reaching the tens of millions of Nigerians without access to banking services remains a difficulty for pure online retailers.

British online sports betting company Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released 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 stated.
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"The development in the number of fintechs, and the federal government as an enabler, has actually helped business to grow. These technological shifts encouraged Betway to start running in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze worked up by Nigeria's participation in the World Cup state they are finding the payment systems produced by local startups such as Paystack are proving popular online.
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Paystack and another regional start-up Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by businesses operating in Nigeria.

"We included Paystack as one of our payment options with no fanfare, without announcing to our consumers, and within a month it shot up to the top most secondhand payment choice on the website," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's 2nd most significant wagering firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice given that it was added in late 2017.

Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage 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, said the number of monthly transactions 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 month," said Emmanuel Quartey, Paystack's head of growth.

He stated an ecosystem of developers had emerged around Paystack, creating software application to integrate the platform into sites. "We have actually seen a development because community and they have carried us along," said Quartey.

Paystack stated it allows payments for a variety of however also a large range of services, from energy services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as 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 corresponded with the arrival of foreign financiers wanting to tap into sports betting.

Industry experts state the sector creates 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 set up in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET's Alabi stated its sales were divided in between shops and online but the ease of electronic payments, expense of running stores and ability for clients to avoid the stigma of gaming in public indicated online transactions would grow.

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

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian sports betting shops often act as social centers where clients can view soccer totally free of charge while placing bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's last heat up game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He said 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 think that a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)