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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology companies that are starting to make online companies more feasible.

For several years, mobile payments failed 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 sluggish web speeds have actually held Nigerian online customers back however sports betting companies says the new, fast digital payment systems underpinning their sites are changing attitudes towards online transactions.

"We have seen considerable growth in the number of payment services that are offered. All that is certainly changing the video gaming space," Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

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

That growth 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 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 costs, Nigeria has actually long been viewed as an excellent opportunity for online services - once customers feel comfy with electronic payments.

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

British online sports betting company Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 growth in the number of fintechs, and the federal government as an enabler, has actually assisted business to flourish. These technological shifts motivated Betway to start operating 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 finding the payment systems produced by regional start-ups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment alternatives with no fanfare, without announcing to our customers, and within a month it shot up to the number one most secondhand payment alternative on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second greatest wagering company, now had 2 million routine customers 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 established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from investors including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, stated the variety of regular monthly deals 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 single month," said Emmanuel Quartey, Paystack's head of growth.

He stated an environment of designers had emerged around Paystack, developing software to incorporate the platform into websites. "We have actually seen a development because neighborhood and they have brought us along," stated Quartey.

Paystack stated it enables payments for a number of wagering companies however likewise a broad variety of organizations, from utility services to carry companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program 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 accompanied the arrival of foreign financiers intending to take advantage of sports betting.

Industry experts state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where 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 firm launched in 2015.

NairaBET's Alabi stated its sales were divided in between stores and online however the ease of electronic payments, cost of running shops and capability for customers to avoid the stigma of gambling in public indicated online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a store network, not least due to the fact that numerous clients still stay unwilling to invest online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian wagering stores often serve as social centers where clients can view soccer free of charge while placing bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's last heat up game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He stated he began gambling 3 months ago and bets up to 1,000 naira a day.

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