By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology companies that are starting to make online companies 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 actually promoted a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have actually held Nigerian online consumers back but sports betting firms states the new, fast digital payment systems underpinning their websites are changing mindsets towards online transactions.
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"We have seen considerable growth in the number of payment options that are available. All that is absolutely altering the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

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

That growth has 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 certified 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone usage and falling information expenses, Nigeria has actually long been viewed as a terrific opportunity for online organizations - once customers feel comfortable with electronic payments.

Online gaming firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services remains a challenge for pure online retailers.

British online wagering company Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

"There is a gradual shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The development in the variety of fintechs, and the government as an enabler, has actually assisted the service to grow. These technological shifts encouraged Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's participation worldwide Cup say they are finding the payment systems produced by local startups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by businesses operating in Nigeria.
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"We included Paystack as one of our payment choices without any fanfare, without revealing to our customers, and within a month it shot up to the primary most used payment choice on the website," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's 2nd most significant sports betting company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option given that it was included late 2017.
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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 program.

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

Paystack, based in the frenetic Ikeja district of Lagos, said the variety of monthly transactions 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 stated an ecosystem of developers had actually emerged around Paystack, creating software application to integrate the platform into sites. "We have actually seen a development in that neighborhood and they have carried us along," stated Quartey.

Paystack said it makes it possible for payments for a variety of wagering firms however likewise a wide variety of companies, from energy services to carry companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.
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FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have accompanied the arrival of foreign investors hoping to use sports betting.

Industry specialists say the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the company is more developed.

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 half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi stated its sales were split in between shops and online but the ease of electronic payments, cost of running shops and capability for consumers to prevent the stigma of gaming in public suggested online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least since numerous clients still stay hesitant to invest online.
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He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian sports betting stores typically serve as social centers where consumers can view soccer complimentary of charge while putting bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he started gambling 3 months earlier and bets as much as 1,000 naira a day.

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