By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems established by homegrown technology firms that are starting to make online services more viable.

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

Fear of electronic scams and sluggish web speeds have held Nigerian online customers back however wagering companies says the new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.
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"We have actually seen substantial development in the number of payment options that are offered. All that is definitely changing the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is faster, whoever can link to their platform with less concerns and glitches," he stated, adding that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth 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 main bank and licensed banks.

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 first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, rising smart phone usage and falling data expenses, Nigeria has long been viewed as a fantastic chance for online services - once consumers feel comfortable with electronic payments.

Online gambling companies say that is happening, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online sellers.
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British online sports betting firm Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.
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"There is a gradual shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya stated.

"The growth in the number of fintechs, and the federal government as an enabler, has assisted business to prosper. These technological shifts encouraged Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's involvement in the World Cup state they are discovering the payment systems created by regional start-ups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment options without any excitement, without revealing to our customers, and within a month it shot up to the number one most secondhand payment option on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second biggest 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 option given that it was included late 2017.

Paystack was set up by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator program.

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

Paystack, based in the frenetic Ikeja 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.

"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 growth.

He said a community of developers had actually emerged around Paystack, developing software to incorporate the platform into websites. "We have seen a development in that neighborhood and they have actually carried us along," stated Quartey.

Paystack said it allows payments for a number of wagering companies however likewise a wide variety of companies, from energy services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to investor 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 actually accompanied the arrival of foreign investors intending to tap into sports betting wagering.

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

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

NairaBET's Alabi said its sales were split in between shops and online but the ease of electronic payments, cost of running shops and ability for customers to prevent the stigma of gaming in public meant online deals 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 lots of consumers still stay hesitant to invest online.

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

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans collected to see Nigeria's final warm up video game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He said he began gambling three months ago and bets approximately 1,000 naira a day.

"Since I have actually 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