By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown innovation firms that are starting to make online businesses more feasible.

For years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have fostered a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back but sports betting firms says the new, quick digital payment systems underpinning their websites are altering mindsets towards online deals.

"We have actually seen significant growth in the variety of payment solutions that are offered. All that is certainly altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business .

"The operators will opt for whoever is faster, whoever can link to their platform with less concerns and glitches," he said, including 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 information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and licensed banks.
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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.
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With a young population of nearly 190 million, rising smart phone use and falling information expenses, Nigeria has actually long been viewed as an excellent chance for online businesses - once consumers feel comfy with electronic payments.

Online sports betting firms state that is happening, though reaching the 10s of countless Nigerians without access to banking services stays a difficulty for pure online sellers.
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British online wagering firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released 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 development in the number of fintechs, and the government as an enabler, has actually helped business to prosper. These technological shifts encouraged Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze worked up by Nigeria's involvement worldwide Cup say they are discovering the payment systems created by local startups such as Paystack are proving popular online.

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

"We added Paystack as one of our payment alternatives without any excitement, without announcing to our clients, and within a month it shot up to the primary most used payment option on the site," said Akin Alabi, creator of NairabBET.
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He stated NairaBET, the country's second most significant wagering company, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option considering that it was included late 2017.

Paystack was set up by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley's Y-Combinator program.

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, stated the number of month-to-month transactions 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 every single month," stated Emmanuel Quartey, Paystack's head of development.

He said an ecosystem of designers had actually emerged around Paystack, developing software application to integrate the platform into websites. "We have actually seen a development because neighborhood and they have carried us along," said Quartey.

Paystack stated it allows payments for a number of sports betting companies however also a broad range of companies, from energy services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program 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 corresponded with the arrival of foreign financiers intending to tap into sports betting.
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Industry experts say the sector generates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business 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 was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company 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 shops and capability for clients to avoid the preconception of sports betting in public meant online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least due to the fact that many clients still remain reluctant to invest online.

He said the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops frequently act as social hubs where customers can see soccer totally free of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's last warm up video game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He stated he began gambling three months earlier 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," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos