By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic fraud and slow web speeds have held Nigerian online consumers back but wagering companies says the new, fast digital payment systems underpinning their websites are changing mindsets towards online transactions.

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

"The operators will opt for whoever is faster, whoever can connect 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 an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing smart phone use and falling data costs, Nigeria has long been seen as a great opportunity for online businesses - once customers feel comfy with electronic payments.
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Online gambling companies state that is happening, though reaching the 10s of millions of Nigerians without access to banking services remains a difficulty for pure online retailers.
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British online sports betting firm Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

"There is a steady shift to online now, that is where the market is going,” Betway's Nigeria manager Lere Awokoya stated.
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"The development in the number of fintechs, and the federal government as an enabler, has assisted the business to thrive. These technological shifts encouraged Betway to start running in Nigeria,” he said.

FINTECH COMPETITION

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

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

"We included Paystack as one of our payment choices with no fanfare, without revealing to our clients, and within a month it shot up to the number one most secondhand payment option on the website,” stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country's 2nd biggest sports betting company, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was included in late 2017.

Paystack was established by 2 Nigerian computer technology 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.
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Paystack, based in the frenetic Ikeja district of Lagos, stated the variety 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 month,” said Emmanuel Quartey, Paystack's head of development.

He said an environment of designers had emerged around Paystack, creating software to incorporate the platform into websites. “We have seen a development because neighborhood and they have actually carried us along,” stated Quartey.

Paystack said it makes it possible for payments for a number of wagering companies but also a vast array of services, from energy services to transport business to insurance company Axa Mansard.

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

FOREIGN INVESTMENT
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Shifts in Nigeria's payment culture have actually accompanied the arrival of foreign financiers intending to use sports betting wagering.

Industry experts say the sector produces 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 led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET's Alabi said its sales were divided between shops and online however the ease of electronic payments, cost of running shops and ability for consumers to prevent the preconception of gaming in public implied online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a shop network, not least since numerous customers still stay unwilling to spend online.

He said the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering shops typically serve as social centers where consumers can view soccer totally free 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 game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He stated he began sports betting three months ago and bets up to 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,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos