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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation companies that are starting to make online companies more practical.

For several 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 promoted a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have held Nigerian online customers back but sports betting firms states the brand-new, quick digital payment systems underpinning their sites are altering attitudes towards online deals.

"We have seen considerable growth in the number of payment solutions that are offered. All that is absolutely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, 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 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 an overall 132 billion naira ($420 million). Transactions jumped 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 cellphone usage and falling information costs, Nigeria has actually long been viewed as a terrific opportunity for online businesses - once consumers feel comfortable with electronic payments.

Online sports betting companies say that is taking place, though reaching the tens of countless Nigerians without access to banking services remains a challenge for pure online retailers.

British online sports betting firm Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 development in the variety of fintechs, and the government as an enabler, has assisted the organization to thrive. These technological shifts motivated Betway to begin operating 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 say they are discovering the payment systems developed by regional startups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by services operating in Nigeria.

"We added Paystack as one of our payment options without any fanfare, without revealing to our customers, and within a month it shot up to the top most used payment option on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's 2nd most significant wagering firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative considering that it was added in late 2017.

Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from financiers 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 month-to-month transactions 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," stated Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it makes it possible for payments for a variety of wagering firms but also a vast array of services, from utility services to carry companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as venture capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.

FOREIGN INVESTMENT

Shifts in culture have actually accompanied the arrival of foreign financiers intending to use sports betting.

Industry experts state the sector creates about $1 billion a year and is 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 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi stated its sales were split between shops and online however the ease of electronic payments, cost of running stores and capability for clients to avoid the stigma 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 essential to have a store network, not least since numerous consumers still remain hesitant to invest online.

He said 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 consumers can enjoy soccer free of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to view Nigeria's last warm up video 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 TV screen inside. He said he began gambling 3 months earlier and bets as much as 1,000 naira a day.

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