By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown innovation companies that are beginning to make online organizations more viable.


For years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have fostered a culture of cashless payments.


Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back but wagering companies says the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.


"We have seen substantial growth in the variety of payment services that are readily available. All that is definitely altering the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.


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


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


With a young population of nearly 190 million, increasing smart phone use and falling data expenses, Nigeria has actually long been viewed as a great chance for online businesses - once customers feel comfy with electronic payments.


Online gaming companies say that is taking place, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online retailers.


British online wagering firm Betway opened its very first African business 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 industry is going," Betway's Nigeria manager Lere Awokoya stated.


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


FINTECH COMPETITION


sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's participation on the planet Cup state they are discovering the payment systems produced by regional start-ups such as Paystack are showing popular online.


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


"We added Paystack as one of our payment options with no excitement, without announcing to our clients, and within a month it soared to the top most used payment option on the website," said Akin Alabi, founder of NairabBET.


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


Paystack was established by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley's Y-Combinator program.


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 frenetic Ikeja district of Lagos, stated the number of monthly transactions it processed increased from about 8,000 in early 2016 to more than 900,000 as of 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 developers had actually emerged around Paystack, developing software application to integrate the platform into sites. "We have seen a growth because community and they have brought us along," stated Quartey.


Paystack stated it enables payments for a variety of wagering companies but likewise a large range of businesses, from utility 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 venture 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 actually corresponded with the arrival of foreign investors wishing to use 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 business is more established.


Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.


NairaBET's Alabi stated its sales were divided between stores and online but the ease of electronic payments, cost of running shops and capability for clients to prevent the preconception of sports betting in public suggested online deals 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 store network, not least since many consumers still stay 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 shops frequently act as social hubs where clients can enjoy soccer totally free of charge while placing bets.


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


Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He stated he began sports betting 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)