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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown innovation firms that are beginning to make online businesses more feasible.
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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 promoted a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have actually held Nigerian online consumers back but wagering companies states the brand-new, fast digital payment systems underpinning their websites are changing attitudes towards online deals.

"We have seen considerable growth in the number of payment solutions that are available. All that is definitely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will opt for whoever is faster, whoever can connect to their platform with less issues and glitches," he stated, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development has actually been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and certified 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 almost 190 million, increasing mobile phone use and falling information costs, Nigeria has long been viewed as an excellent opportunity for online companies - once consumers feel comfortable with electronic payments.

Online gambling 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 first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

"There is a progressive shift to online now, that is where the industry is going," Betway's Nigeria manager stated.

"The growth in the variety of fintechs, and the government as an enabler, has assisted business to thrive. These technological shifts encouraged Betway to start running in Nigeria," he said.

FINTECH COMPETITION
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sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's involvement on the planet Cup say they are discovering the payment systems created by regional startups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment alternatives without any fanfare, without announcing to our customers, and within a month it shot up to the number one most used payment alternative on the site," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's second greatest sports betting 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 included late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley's Y-Combinator programme.

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 frenetic Ikeja district of Lagos, said the number of month-to-month 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 month," stated Emmanuel Quartey, Paystack's head of growth.

He said a community of developers had emerged around Paystack, producing software to integrate the platform into sites. "We have actually seen a development in that neighborhood and they have actually carried us along," said Quartey.

Paystack said it makes it possible for payments for a number of wagering firms but also a large range of services, from energy services to carry companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur 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 in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually coincided with the arrival of foreign financiers wanting to take advantage of sports betting wagering.
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Industry specialists state the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service is more developed.

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 stated its sales were divided in between stores and online however the ease of electronic payments, cost of running shops and ability for customers to avoid the stigma of gambling in public implied 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 shop network, not least because lots of customers still remain unwilling 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 frequently serve as social hubs where consumers can enjoy soccer complimentary of charge while positioning bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria's last heat up video 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 said he started sports betting 3 months earlier and bets up to 1,000 naira a day.

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