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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown technology companies that are beginning to make online companies more feasible.
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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 actually fostered a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online customers back but wagering firms states the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online deals.

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

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

That growth has actually been matched by an in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed banks.

In 2016, there were 14 million web payments worth an overall 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 cellphone use and falling information expenses, Nigeria has long been viewed as an excellent opportunity for online companies - once customers feel comfortable with electronic payments.

Online gambling companies state that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

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

"The development in the number of fintechs, and the government as an enabler, has actually helped business to thrive. These technological shifts motivated Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria's involvement worldwide Cup say they are discovering the payment systems developed by local startups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment choices with no fanfare, without revealing to our clients, and within a month it shot up to the top most used payment option on the site," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second biggest sports betting firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option because it was included late 2017.

Paystack was set up by two Nigerian computer technology 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 mad Ikeja district of Lagos, said the number of regular monthly deals it processed rose 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 each and every single month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack stated it enables payments for a variety of sports betting firms but likewise a large variety of services, from utility services to carry companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with 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 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 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 company released in 2015.

NairaBET's Alabi stated its sales were split between shops and online however the ease of electronic payments, expense of running shops and capability for customers to avoid the stigma of sports betting in public meant online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a store network, not least because numerous customers still remain reluctant to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops frequently act as social centers where customers can see soccer free of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's final heat up game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He stated he started gambling three months ago and bets as much as 1,000 naira a day.

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