By Alexis Akwagyiram and Didi Akinyelure
bet9ja.com
LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation companies that are beginning to make online businesses more viable.
bet9ja.com
For several years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have promoted a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have held Nigerian online customers back but sports betting companies states the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.

"We have actually seen significant growth in the number of payment services that are readily available. All that is certainly altering the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial 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 rose 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 central 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 first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising mobile phone use and falling data expenses, Nigeria has long been viewed as an excellent opportunity for online services - once consumers feel comfortable with electronic payments.
bit.ly
Online gaming companies state that is happening, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online sellers.
bet9ja.com
British online sports betting firm Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

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

"The growth in the number of fintechs, and the federal government as an enabler, has actually assisted the organization to prosper. These technological shifts encouraged Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation in the World Cup state they are finding the payment systems created by local start-ups such as Paystack are showing popular online.

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

"We added Paystack as one of our payment alternatives with no excitement, without revealing to our consumers, and within a month it shot up to the primary most pre-owned payment choice on the website," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country's second greatest sports betting firm, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative since it was included late 2017.

Paystack was set up by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from investors 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 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 said a community of developers had actually emerged around Paystack, producing software application to integrate the platform into websites. "We have seen a development because neighborhood and they have brought us along," said .

Paystack stated it allows payments for a number of wagering companies but also a wide variety of organizations, from energy services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to venture capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.
bet9ja.com
FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have accompanied the arrival of foreign financiers wanting to take advantage of sports betting wagering.

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 established in Nigeria in the last two years while Italy's Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi stated its sales were split between shops and online but the ease of electronic payments, cost of running shops and capability for clients to avoid the stigma of gaming in public suggested online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a store network, not least because lots of customers still remain unwilling to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering stores frequently function as social hubs where consumers can see soccer complimentary of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria's last warm up game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a television screen inside. He said he began gambling 3 months ago and bets as much as 1,000 naira a day.

"Since I have actually 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