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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology companies that are beginning to make online organizations more viable.
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For several years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back however wagering companies says the brand-new, fast digital payment systems underpinning their sites are changing mindsets towards online transactions.

"We have seen considerable development in the variety of payment solutions that are readily available. All that is definitely altering the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will go with whoever is much faster, whoever can link to their platform with less issues and problems," he said, including that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development has actually been matched by a rise in web payments, according to data 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 almost 10 million worth 61 billion.

With a young population of almost 190 million, rising cellphone use and falling data expenses, Nigeria has actually long been seen as a great chance for online organizations - once customers feel comfortable with electronic payments.

Online gaming companies say that is taking place, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online merchants.

British online sports betting 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 manager Lere Awokoya said.

"The development in the variety of fintechs, and the government as an enabler, has actually assisted the business to thrive. These technological shifts encouraged Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze whipped up by Nigeria's involvement on the planet Cup say they are discovering the payment systems developed by local startups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by companies operating in Nigeria.

"We added Paystack as one of our payment choices with no fanfare, without announcing to our clients, and within a month it soared to the number one most used payment option on the website," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's 2nd biggest sports betting firm, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was included late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got 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 mad Ikeja district of Lagos, stated the variety of monthly deals 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 single month," stated Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of designers had actually emerged around Paystack, creating software application to integrate the platform into websites. "We have actually seen a growth because community and they have carried us along," stated Quartey.

Paystack said it enables payments for a variety of sports betting firms but likewise a vast array of organizations, from energy services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise 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 actually coincided with the arrival of foreign financiers wishing to use sports betting wagering.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi stated its sales were divided in between shops and online however the ease of electronic payments, cost of running stores and ability for consumers to avoid the preconception of gaming 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 because lots of consumers still stay reluctant to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering shops typically function as social centers where clients can watch soccer free of charge while positioning bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's final warm up game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he started sports betting 3 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 believe that a person day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos