By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation companies that are starting to make online organizations more practical.
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For years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back however wagering firms says the brand-new, fast digital payment systems underpinning their websites are altering attitudes towards online deals.

"We have seen considerable development in the variety of payment options that are readily available. All that is definitely changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

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

That growth has been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed banks.
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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 almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone usage and falling information costs, Nigeria has long been seen as a terrific chance for online businesses - once customers feel comfortable with electronic payments.

Online gaming firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online sellers.

British online sports betting firm Betway opened its first African service 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 said.

"The development in the number of fintechs, and the 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 cashing in on the soccer craze whipped up by Nigeria's involvement worldwide Cup state they are discovering the payment systems created by local start-ups such as Paystack are proving popular online.

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

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

He said NairaBET, the nation's second most significant wagering firm, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was included in late 2017.

Paystack was established by two 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 investors including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the number 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 every single month," said Emmanuel Quartey, Paystack's head of development.

He stated an ecosystem of designers had emerged around Paystack, creating software application to incorporate the platform into sites. "We have actually seen a growth in that neighborhood and they have brought us along," said Quartey.

Paystack said it allows payments for a variety of wagering companies however also a large range of businesses, from energy services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as endeavor capitalists 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 accompanied the arrival of foreign financiers hoping to tap into sports betting.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET's Alabi stated its sales were divided in between stores and online but the ease of electronic payments, expense of running stores and ability for consumers to avoid the stigma of sports betting in public indicated online transactions would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least due to the fact that lots of clients still stay reluctant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering shops often act as social hubs where clients can watch 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 final 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 fixated on a television screen inside. He said he began sports betting 3 months earlier and bets up to 1,000 naira a day.

"Since I have actually 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