By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) sports betting is growing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation companies that are beginning to make online companies more practical.

For several 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 cultivated a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have actually held Nigerian online consumers back however wagering firms says the brand-new, quick digital payment systems underpinning their sites are changing attitudes towards online deals.

"We have seen considerable development in the number of payment solutions that are readily available. All that is absolutely altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will go with whoever is faster, whoever can connect to their platform with less issues and glitches," he said, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has 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 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising mobile phone use and falling information expenses, Nigeria has actually long been viewed as an excellent opportunity for online organizations - once customers feel comfortable with electronic payments.

Online gambling firms state that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays a difficulty for pure online merchants.

British online sports betting firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

"There is a steady 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 assisted the business to prosper. These technological shifts motivated Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION
bet9ja.com
sports betting companies capitalizing 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 showing popular online.

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

"We included Paystack as one of our payment options without any excitement, without announcing to our customers, and within a month it soared to the primary most used payment option on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second biggest sports betting firm, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative given that it was added in late 2017.

Paystack was established by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early phase funding 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 month," said Emmanuel Quartey, Paystack's head of development.

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

Paystack stated it allows payments for a variety of wagering companies but also a vast array of businesses, from utility services to carry companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme in addition to 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 coincided with the arrival of foreign investors hoping to tap into sports betting.

Industry specialists state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more established.
bet9ja.com
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 company launched in 2015.
bit.ly
NairaBET's Alabi said its sales were split in between shops and online but the ease of electronic payments, cost of running stores and capability for customers to prevent the stigma of sports betting in public meant online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a shop network, not least since numerous customers still stay hesitant to spend online.

He said the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores typically function as social centers where consumers can watch soccer free of charge while positioning bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's final warm up game before the World Cup.
bet9ja.com
Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a television screen inside. He said he began gambling 3 months earlier and bets as much as 1,000 naira a day.

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