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

For years, mobile payments failed to remove 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 web speeds have held Nigerian online consumers back however sports betting firms says the brand-new, fast digital payment systems underpinning their sites are altering mindsets towards online transactions.

"We have actually seen considerable development in the number of payment solutions that are offered. All that is definitely altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will opt for whoever is much faster, whoever can link 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.
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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 central bank and certified banks.

In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, increasing mobile phone usage and falling data expenses, Nigeria has actually long been seen as a great chance for online companies - once customers feel comfortable with electronic payments.

Online gaming companies say that is happening, though reaching the 10s of millions of Nigerians without access to banking services stays a difficulty for pure online sellers.

British online sports betting company Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.
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"There is a progressive shift to online now, that is where the industry 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 helped business to flourish. These technological shifts motivated Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION

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

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

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

He said NairaBET, the nation's 2nd biggest sports betting company, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was added in late 2017.

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

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

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

He said an ecosystem of developers had emerged around Paystack, developing software application to integrate the platform into sites. "We have actually seen a development because neighborhood and they have brought us along," stated Quartey.
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Paystack said it allows payments for a number of wagering firms however likewise a vast array of organizations, from utility services to transfer companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with endeavor capitalists 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 financiers wanting to take advantage of sports betting wagering.

Industry professionals 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 established.

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.
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NairaBET's Alabi stated its sales were split between stores and online but the ease of electronic payments, cost of running stores and ability for consumers to avoid the preconception of gambling in public implied online transactions would grow.

But in spite 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 lots of clients still stay hesitant to invest online.

He said the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting stores often function as social hubs where consumers can watch soccer of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to see Nigeria's last heat up 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 said he began sports betting 3 months earlier and bets approximately 1,000 naira a day.

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