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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 established by homegrown technology companies that are beginning to make online organizations more practical.
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For many years, mobile payments failed to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have cultivated a culture of cashless payments.

Fear of electronic scams and sluggish internet speeds have actually held Nigerian online consumers back but sports betting companies says the brand-new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.

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

"The operators will opt for whoever is quicker, whoever can link to their platform with less concerns and problems," he said, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development 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 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, rising mobile phone use and falling information costs, Nigeria has long been seen as a fantastic opportunity for online businesses - once customers feel comfy with electronic payments.

Online gambling companies state that is taking place, though reaching the 10s 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 company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.

"The growth in the variety of fintechs, and the government as an enabler, has actually helped the organization to prosper. These technological shifts encouraged Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation on the planet Cup say they are discovering the payment systems created by regional startups such as Paystack are showing popular online.

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

"We added Paystack as one of our payment alternatives without any excitement, without revealing to our clients, and within a month it shot up to the top most pre-owned payment option on the site," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's second biggest sports betting firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option because it was included late 2017.

Paystack was established by 2 Nigerian computer science 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 frenetic Ikeja district of Lagos, said the number of regular monthly transactions it processed rose 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," stated Emmanuel Quartey, Paystack's head of growth.

He stated an environment of developers had actually emerged around Paystack, producing software to incorporate the platform into websites. "We have seen a development in that neighborhood and they have brought us along," said Quartey.

Paystack said it enables payments for a variety of wagering firms however also a vast array of organizations, from energy services to transfer business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the 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 actually accompanied the arrival of foreign financiers hoping to tap into sports betting.

Industry specialists 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 led the trend, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi stated its sales were split in between shops and online however the ease of electronic payments, expense of running shops and capability for customers to avoid the preconception of gambling in public meant online deals would grow.

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

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

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to enjoy Nigeria's final warm up game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a TV screen inside. He said he started sports betting 3 months back and bets up to 1,000 naira a day.

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