By Alexis Akwagyiram and Didi Akinyelure


LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology companies that are starting to make online businesses more feasible.


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


Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online consumers back however wagering companies says the new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.


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


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


That growth has actually been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and certified 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 nearly 10 million worth 61 billion.


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


Online gambling firms state that is occurring, though reaching the tens of countless Nigerians without access to banking services stays an obstacle 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 launched in Nigeria in January.


"There is a progressive shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya said.


"The development in the number of fintechs, and the federal government as an enabler, has helped the business to thrive. These technological shifts encouraged Betway to begin running in Nigeria," he stated.


FINTECH COMPETITION


sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's involvement worldwide Cup say they are discovering the payment systems created by regional startups such as Paystack are showing popular online.


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


"We included Paystack as one of our payment choices with no fanfare, without announcing to our clients, and within a month it soared to the number one most used payment option on the site," stated Akin Alabi, founder of NairabBET.


He stated NairaBET, the country's 2nd greatest sports betting company, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that 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 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 mad Ikeja district of Lagos, said the number of regular monthly 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 single month," said Emmanuel Quartey, Paystack's head of growth.




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


Paystack said it enables payments for a variety of wagering firms but likewise a wide variety of services, from utility services to transport business to insurance provider Axa Mansard.


Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as 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 wanting to take advantage of sports betting.


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


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


NairaBET's Alabi stated its sales were split between stores and online but the ease of electronic payments, expense of running shops and ability for consumers to avoid the preconception of gambling in public meant online deals would grow.


But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a store network, not least because numerous consumers still remain reluctant to spend online.


He said the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian wagering stores frequently serve as social centers where consumers can view 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 view Nigeria's final heat up video game before the World Cup.


Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He said he started sports betting three months ago and bets up to 1,000 naira a day.


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