By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation companies that are beginning to make online organizations 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 cash transfers have actually cultivated a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have actually held Nigerian online customers back but sports betting firms states the brand-new, fast digital payment systems underpinning their sites are altering mindsets towards online transactions.
bet9ja.com
"We have seen substantial development in the number of payment options that are readily available. All that is definitely altering the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will opt for whoever is much faster, whoever can connect to their platform with less problems 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 a rise in web payments, according to information 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 a total 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing mobile phone usage and falling data expenses, Nigeria has actually long been seen as a fantastic opportunity for online companies - once consumers feel comfortable with electronic payments.

Online gambling companies say that is happening, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online sellers.
bit.ly
British online wagering firm Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

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

"The growth in the number of fintechs, and the government as an enabler, has helped the service to grow. These technological shifts motivated Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's involvement in the World Cup say they are finding the payment systems produced by regional startups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment choices without any excitement, without announcing to our clients, and within a month it shot up to the primary most secondhand payment option on the site," said Akin Alabi, creator of NairabBET.
bit.ly
He said NairaBET, the nation's second most significant sports betting firm, now had 2 million regular customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was included 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 financiers including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the variety of month-to-month deals it processed increased from about 8,000 in early 2016 to more than 900,000 as of June 2018.
bet9ja.com
"In early 2016 we were processing about $3,000 a month. Today we process well over $11 million every month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it enables payments for a variety of wagering companies however also a vast array of businesses, from utility services to transfer 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 venture capitalists 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 accompanied the arrival of foreign financiers wishing to take advantage of sports betting wagering.

Industry experts say the sector produces 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 2 years while Italy's Goldbet was ahead of the pattern, 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, cost of running shops and capability for clients to avoid the preconception of sports betting in public suggested online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least since many consumers still remain reluctant to invest 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 clients can view soccer free of charge while placing bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a TV screen inside. He stated he started sports betting three months back and bets approximately 1,000 naira a day.

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