By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology firms that are starting to make online companies more feasible.
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For years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.

Fear of electronic scams and slow web speeds have held Nigerian online consumers back but wagering companies states the brand-new, quick digital payment systems underpinning their websites are altering mindsets towards online deals.

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

"The operators will choose whoever is quicker, whoever can link to their platform with less concerns 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 development has actually been matched by a rise 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 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 almost 190 million, rising smart phone use and falling information costs, Nigeria has long been viewed as an excellent opportunity for online services - once consumers feel comfy with electronic payments.

Online gambling companies state that is happening, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle for pure online retailers.
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British online wagering company Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

"There is a progressive shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya said.

"The growth in the number of fintechs, and the federal government as an enabler, has helped business to prosper. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria's participation in the World Cup state they are finding the payment systems created by regional start-ups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the main platform used by businesses running in Nigeria.
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"We added Paystack as one of our payment alternatives with no excitement, without revealing to our customers, and within a month it shot up to the top most pre-owned payment option on the site," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's 2nd biggest sports betting company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice considering that it was included in late 2017.

Paystack was set up by two Nigerian computer 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 including 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 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 every month," said Emmanuel Quartey, Paystack's head of growth.

He said a community of designers had actually emerged around Paystack, producing software application to integrate the platform into websites. "We have actually seen a development because community and they have actually brought us along," said Quartey.

Paystack said it enables payments for a number of sports betting companies but also a wide variety of services, from energy 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 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 accompanied the arrival of foreign investors wanting to take advantage of sports betting.

Industry specialists state the sector creates 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 pattern, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split between stores and online however the ease of electronic payments, expense of running stores and ability for customers to prevent the preconception of sports betting in public meant online deals would grow.

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

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

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria's final heat up game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television 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 believe that one day I will win," said Onuka. ($1 = 314.5000 naira) ( by Alexis Akwagyiram and Didi Akinyelure in Lagos