By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation companies that are beginning to make online organizations more viable.
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For many years, mobile payments failed to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back however wagering companies states the new, fast digital payment systems underpinning their websites are altering mindsets towards online deals.

"We have actually seen considerable development in the variety of payment solutions that are readily available. All that is certainly changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will go with whoever is faster, whoever can connect to their platform with less issues and glitches," he said, 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 a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 nearly 190 million, rising smart phone usage and falling data expenses, Nigeria has actually long been seen as a great chance for online companies - once consumers feel comfortable with electronic payments.

Online gaming firms say that is happening, though reaching the 10s of millions of Nigerians without access to banking services remains a challenge for pure online merchants.

British online sports betting firm Betway opened its first African service 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 supervisor Lere Awokoya said.
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"The growth in the number of fintechs, and the government as an enabler, has helped business to prosper. These technological shifts motivated Betway to start operating in Nigeria," he said.
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FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's involvement on the planet Cup state they are discovering the payment systems produced by local startups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by services running in Nigeria.

"We included Paystack as one of our payment alternatives without any fanfare, without revealing to our consumers, and within a month it soared to the number one most secondhand payment alternative on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country's 2nd most significant sports betting company, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was added in late 2017.

Paystack was set up by two computer technology graduates, Shola Akinlade and Ezra Olubi, who got 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 mad 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 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 stated a community of designers had emerged around Paystack, producing software application to incorporate the platform into websites. "We have actually seen a development because community and they have carried us along," said Quartey.

Paystack said it makes it possible for payments for a number of wagering companies but likewise a large range of businesses, from utility services to transport companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program in addition to venture capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.

FOREIGN INVESTMENT
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Shifts in Nigeria's payment culture have actually accompanied the arrival of foreign financiers hoping to use sports betting wagering.

Industry experts say the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the organization is more developed.

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi said its sales were split between shops and online but the ease of electronic payments, expense of running stores and ability for consumers to prevent the stigma of gambling in public implied online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a shop network, not least due to the fact that numerous consumers still stay hesitant 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 often function as social centers where clients can view soccer complimentary of charge while positioning bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to enjoy Nigeria's final warm up game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he began sports betting three months back and bets approximately 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos