By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are beginning to make online organizations more viable.

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

Fear of electronic scams and sluggish internet speeds have held Nigerian online consumers back but wagering firms states the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online transactions.

"We have seen considerable development in the number of payment solutions that are available. All that is definitely altering 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 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 rose 30 percent to 40 percent in 2017 from 2016.

That development 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 a total 132 billion naira ($420 million). Transactions jumped 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 almost 190 million, increasing mobile phone use and falling data costs, Nigeria has long been viewed as a great opportunity for online businesses - once customers feel comfy with electronic payments.

Online gaming companies say that is happening, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online retailers.

British online wagering firm Betway opened its very first African business 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 supervisor Lere Awokoya stated.

"The development in the variety of fintechs, and the federal government as an enabler, has helped business to thrive. These technological shifts motivated Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION
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sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's involvement in the World Cup say they are discovering the payment systems developed by regional start-ups such as Paystack are proving popular online.

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

"We added Paystack as one of our payment alternatives without any fanfare, without revealing to our clients, and within a month it soared to the number one most secondhand payment choice on the site," said Akin Alabi, of NairabBET.

He stated NairaBET, the nation's 2nd greatest sports betting firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice given that it was included late 2017.

Paystack was established by two Nigerian computer technology 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 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, said the number of month-to-month 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 each and every single month," said Emmanuel Quartey, Paystack's head of development.
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He said a community of designers had emerged around Paystack, developing software to incorporate the platform into websites. "We have seen a development in that community and they have actually carried us along," stated Quartey.

Paystack stated it enables payments for a number of wagering firms but likewise a wide variety of services, from utility services to transport companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 financiers wanting to use sports betting.

Industry professionals state 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 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 pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi stated its sales were split in between shops and online but the ease of electronic payments, expense of running stores and capability 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 crucial to have a shop network, not least since numerous consumers still stay reluctant to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting stores typically act as social hubs where clients can view soccer free of charge while placing bets.
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At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's last warm up game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He stated he began gambling three months back and bets up to 1,000 naira a day.

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