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 innovation companies that are starting to make online companies more practical.

For 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 promoted a culture of cashless payments.
bit.ly
Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back however sports betting firms states the new, fast digital payment systems underpinning their websites are changing mindsets towards online deals.

"We have actually seen considerable growth in the variety of payment solutions that are offered. All that is definitely altering the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

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

That growth has actually 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 licensed 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 almost 190 million, increasing cellphone usage and falling data costs, Nigeria has actually long been seen as a terrific opportunity for online businesses - once customers feel comfy with electronic payments.

Online gambling companies say that is taking place, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online merchants.
bet9ja.com
British online sports betting company Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.
bet9ja.com
"There is a progressive shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya said.

"The growth in the variety of fintechs, and the federal government as an enabler, has assisted business to thrive. These technological shifts motivated Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's involvement in the World Cup state they are finding the payment systems produced by local startups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are offering competition 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 without any fanfare, without announcing to our consumers, and within a month it soared to the primary most pre-owned payment alternative on the website," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second biggest wagering company, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given that it was included in late 2017.

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

In December 2016, it raised $1.3 million from investors 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 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," said Emmanuel Quartey, Paystack's head of development.

He said an environment of designers had actually emerged around Paystack, producing software application to the platform into sites. "We have actually seen a growth in that community and they have carried us along," said Quartey.

Paystack stated it makes it possible for payments for a number of sports betting firms however likewise a vast array of services, from energy services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program 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 coincided with the arrival of foreign financiers hoping to tap into sports betting wagering.

Industry experts say the sector creates 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 both established in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.
bet9ja.com
NairaBET's Alabi said its sales were divided in between shops and online but the ease of electronic payments, expense of running stores and ability for clients to avoid the stigma of sports betting in public implied 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 shop network, not least because many customers still remain unwilling to spend online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores frequently serve as social centers where customers can watch soccer complimentary of charge while putting bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He stated he started sports betting 3 months earlier and bets up to 1,000 naira a day.

"Since I have actually been playing I have actually not won anything but 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)