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

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 cultivated a culture of cashless payments.

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

"We have seen substantial development in the variety of payment services that are offered. All that is definitely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is faster, whoever can link to their platform with less concerns and problems," he stated, including that taxes from sports betting 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 data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and certified 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising smart phone use and falling information costs, Nigeria has actually long been viewed as an excellent chance for online services - once consumers feel comfortable with electronic payments.

Online sports betting companies say that is taking place, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online retailers.

British online sports betting firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

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

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

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's participation on the planet Cup say they are finding the payment systems produced by regional startups such as Paystack are proving popular online.

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

"We added Paystack as one of our payment alternatives with no fanfare, without revealing to our clients, and within a month it soared to the number one most secondhand payment alternative on the website," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second greatest wagering company, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was added in late 2017.

Paystack was set up by two Nigerian computer science 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 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 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 said a community of developers had emerged around Paystack, producing software to incorporate the platform into sites. "We have actually seen a growth in that neighborhood and they have carried us along," said Quartey.

Paystack stated it makes it possible for payments for a number of wagering companies however likewise a large range of companies, from energy services to transport companies to insurance provider 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually accompanied the arrival of foreign investors wishing to tap into sports betting wagering.

Industry specialists state the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the company is more established.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

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

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least because lots of consumers still remain unwilling to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting shops frequently serve as social hubs where customers can see soccer complimentary of charge while positioning bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to see Nigeria's last warm up video game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a television screen inside. He said he started gambling three months ago and bets as much as 1,000 naira a day.

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