By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation firms that are beginning to make online businesses more viable.
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For many years, mobile payments failed 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 internet speeds have held Nigerian online customers back however sports betting companies says the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

"We have actually seen substantial development in the number of payment options that are readily available. 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 faster, whoever can link to their platform with less issues 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 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 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.
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With a young population of nearly 190 million, increasing cellphone usage and falling data expenses, Nigeria has actually long been seen as an excellent chance for online businesses - once consumers feel comfortable with electronic payments.

Online gaming firms state that is occurring, though reaching the 10s of countless Nigerians without access to banking services stays a difficulty for pure online retailers.

British online sports betting company Betway opened its very 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 market is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The development in the number of fintechs, and the government as an enabler, has helped the company to prosper. These technological shifts motivated Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

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

Paystack and another regional start-up Flutterwave, both established in 2016, are offering competitors 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 choices without any fanfare, without revealing to our consumers, and within a month it soared to the top most secondhand payment choice on the website," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's 2nd most significant sports betting company, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative since it was included late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator programme.

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

Paystack, based in the district of Lagos, stated the variety of regular monthly deals it processed rose from about 8,000 in early 2016 to more than 900,000 since June 2018.
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"In early 2016 we were processing about $3,000 a month. Today we process well over $11 million each and every single month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it enables payments for a number of sports betting firms however likewise a large range of businesses, 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 programme along with investor 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 corresponded with the arrival of foreign investors intending to take advantage of sports betting.
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Industry specialists say the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service is more developed.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi stated its sales were divided between stores and online however the ease of electronic payments, expense of running stores and ability for consumers to prevent the preconception of sports betting 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 important to have a store network, not least because lots of customers still remain hesitant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering stores frequently serve as social hubs where consumers can enjoy soccer free of charge while positioning bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria's final heat up game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He stated he started gambling 3 months back and bets approximately 1,000 naira a day.

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