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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mostly thanks to payment systems established by homegrown technology firms that are beginning to make online organizations more feasible.
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For several years, mobile payments stopped working to take off 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 scams and slow web speeds have actually held Nigerian online customers back but wagering firms states the new, fast digital payment systems underpinning their sites are altering attitudes towards online deals.

"We have seen substantial growth in the variety of payment options that are available. All that is absolutely changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will choose whoever is faster, whoever can link to their platform with less problems and glitches," he said, adding 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 an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone use and falling data expenses, Nigeria has actually long been viewed as a fantastic opportunity for online services - once consumers feel comfortable with electronic payments.

Online gaming firms say that is taking place, though reaching the tens of countless Nigerians without access to banking services stays a challenge for pure online sellers.

British online sports betting firm Betway opened its 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 development in the number of fintechs, and the federal government as an enabler, has actually helped business to grow. These technological shifts encouraged Betway to start running in Nigeria," he said.

FINTECH COMPETITION

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

Paystack and another local startup Flutterwave, both founded in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by services operating in Nigeria.

"We included Paystack as one of our payment choices with no fanfare, without revealing to our consumers, and within a month it soared to the top most used payment choice on the site," stated Akin Alabi, creator of NairabBET.
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He stated NairaBET, the nation's 2nd most significant wagering company, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was added in late 2017.
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Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage 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 mad Ikeja district of Lagos, said the number of regular 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 each and every single month," stated Emmanuel Quartey, Paystack's head of development.

He said a community of developers had actually emerged around Paystack, producing software to integrate the platform into websites. "We have actually seen a development because community and they have carried us along," said Quartey.

Paystack stated it enables payments for a number of wagering firms but likewise a wide variety of services, from energy services to transport 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 in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have coincided with the arrival of foreign investors hoping to take advantage of sports betting wagering.

Industry experts state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service 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 trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi said its sales were divided between stores and online but the ease of electronic payments, expense of running stores and capability for customers to prevent the stigma of in public indicated 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 consumers still remain reluctant to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting stores frequently function as social hubs where consumers can enjoy soccer free of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to view Nigeria's last heat up video game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He said he began gambling three months earlier and bets approximately 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