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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 mostly thanks to payment systems established by homegrown innovation firms that are beginning to make online companies more feasible.
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For 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 fostered a culture of cashless payments.

Fear of electronic scams and sluggish internet speeds have actually held Nigerian online customers back however sports betting companies states the new, fast digital payment systems underpinning their sites are changing mindsets towards online transactions.

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

"The operators will choose whoever is quicker, whoever can link to their platform with less problems and problems," he said, adding that taxes from sports betting wagering 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 information 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, increasing smart phone use and falling data expenses, Nigeria has actually long been seen as a terrific opportunity for online businesses - once consumers feel comfortable with electronic payments.

Online gaming companies state that is occurring, though reaching the tens of millions of Nigerians without access to banking services remains an obstacle for pure online retailers.

British online sports betting firm Betway opened its first African organization 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 manager Lere Awokoya stated.

"The growth in the number of fintechs, and the federal government as an enabler, has assisted the service to prosper. These technological shifts encouraged Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's participation worldwide Cup state they are finding the payment systems created by regional startups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by companies running in Nigeria.

"We added Paystack as one of our payment options with no fanfare, without revealing to our customers, and within a month it soared to the primary most pre-owned payment option on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second most significant wagering company, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was added in late 2017.

Paystack was established by two 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.

Paystack, based in the mad 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 every single month," said Emmanuel Quartey, Paystack's head of development.

He stated an environment of developers had emerged around Paystack, developing software to incorporate the platform into sites. "We have actually seen a growth because community and they have actually brought us along," stated Quartey.

Paystack said it makes it possible for payments for a variety of sports betting firms but likewise a large range of services, from utility services to transfer companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as 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 actually accompanied the arrival of foreign investors intending to take advantage of sports betting.

Industry specialists say the sector generates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the organization is more developed.

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi stated its sales were divided in between stores and online however the ease of electronic payments, expense of running shops and capability for clients to the stigma of gaming in public meant online deals would grow.

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

He said the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting stores often function as social centers where consumers can enjoy soccer totally free of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to watch Nigeria's final heat up video 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 television screen inside. He said he began sports betting three months back and bets approximately 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos