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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology companies that are beginning to make online businesses more viable.
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For many years, mobile payments failed to take off 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 scams and slow internet speeds have actually held Nigerian online customers back however wagering firms says the new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.

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

"The operators will opt for whoever is much faster, whoever can link to their platform with less problems and glitches," he stated, including that taxes from sports betting in Lagos State increased 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 licensed banks.
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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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising cellphone usage and falling data costs, Nigeria has actually long been seen as a terrific chance for online businesses - once consumers feel comfortable with electronic payments.

Online gaming firms state that is occurring, though reaching the 10s of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

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

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

"The growth in the variety of fintechs, and the federal government as an enabler, has actually helped business to flourish. These technological shifts motivated Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's participation worldwide Cup state they are discovering the payment systems developed by regional start-ups such as Paystack are proving popular online.
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Paystack and another local start-up Flutterwave, both established in 2016, are offering competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by services operating in .

"We added Paystack as one of our payment options with no excitement, without announcing to our customers, and within a month it shot up to the primary most used payment alternative on the website," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's 2nd most significant sports betting firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was included 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 programme.

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 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 an ecosystem of designers had actually emerged around Paystack, producing software application to incorporate the platform into websites. "We have seen a development in that community and they have actually carried us along," said Quartey.

Paystack said it makes it possible for payments for a variety of sports betting companies but also a wide variety of companies, from energy services to transfer companies to insurer Axa Mansard.
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Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with venture capitalists 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 corresponded with the arrival of foreign investors hoping to use sports betting wagering.

Industry professionals 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 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi said its sales were split between shops and online but the ease of electronic payments, expense of running stores and ability for clients to prevent the preconception of gaming in public suggested online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a shop network, not least since many clients still remain hesitant to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting shops often act as social centers where customers can see soccer totally free of charge while positioning bets.

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

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