By Alexis Akwagyiram and Didi Akinyelure
bet9ja.com
LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown innovation companies that are beginning to make online organizations more viable.
bet9ja.com
For several years, mobile payments stopped working to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have fostered a culture of cashless payments.
bit.ly
Fear of electronic scams and slow web speeds have actually held Nigerian online consumers back however sports betting companies says the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online deals.

"We have seen significant growth in the variety of payment solutions that are readily available. All that is definitely changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is quicker, whoever can connect to their platform with less issues and glitches," he said, including that taxes from sports betting in Lagos State increased 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 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 nearly 190 million, increasing smart phone use and falling information costs, Nigeria has long been viewed as an excellent opportunity for online companies - once consumers feel comfortable with electronic payments.

Online gambling companies state that is occurring, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online merchants.

British online wagering company Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.
bet9ja.com
"There is a gradual shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya stated.

"The development in the variety of fintechs, and the government as an enabler, has helped the organization to flourish. These technological shifts motivated Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy worked up by Nigeria's involvement on the planet Cup state they are finding the payment systems produced by local start-ups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the main platform used by organizations running in Nigeria.

"We included Paystack as one of our payment choices without any fanfare, without announcing to our customers, and within a month it soared to the primary most pre-owned payment choice on the website," said Akin Alabi, founder of NairabBET.

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

Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from financiers consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, stated the variety 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 month," stated Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of developers had actually emerged around Paystack, producing software to incorporate the platform into sites. "We have actually seen a development in that community and they have carried us along," said Quartey.

Paystack said it makes it possible for payments for a variety of wagering companies but likewise a vast array of services, from energy services to carry business to insurance provider Axa Mansard.
bit.ly
Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with endeavor capitalists 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 actually accompanied the arrival of foreign financiers hoping to tap into sports betting wagering.

Industry experts state 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 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi stated its sales were divided in between stores and online but the ease of electronic payments, expense of running stores and capability for customers to avoid the stigma of gambling in public indicated 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 because many consumers still remain hesitant to invest online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting stores frequently act as social hubs where customers can view soccer complimentary of charge while placing bets.

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

Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a TV screen inside. He stated he began gambling 3 months earlier and bets approximately 1,000 naira a day.

"Since I have actually been playing I have 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