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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are starting to make online organizations more feasible.
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For years, mobile payments failed to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have actually promoted a culture of cashless payments.

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

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

"The operators will choose whoever is faster, whoever can link to their platform with less issues 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 an increase in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising smart phone usage and falling information costs, Nigeria has long been seen as a great opportunity for online businesses - once consumers feel comfy with electronic payments.

Online gambling firms say that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays a difficulty for pure online sellers.

British online wagering company Betway opened its first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

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

"The growth in the number of fintechs, and the federal government as an enabler, has helped the business to grow. These technological shifts encouraged Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's participation on the planet Cup say they are discovering the payment systems developed by regional startups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform used by companies running in Nigeria.

"We added Paystack as one of our payment options without any excitement, without announcing to our clients, and within a month it soared to the primary most secondhand payment choice on the site," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's second most significant sports betting firm, now had 2 million regular customers 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 two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage 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, stated the number of month-to-month deals it processed increased 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 development.

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

Paystack stated it makes it possible for payments for a number of wagering companies but likewise a wide variety of companies, from utility services to transport companies 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 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 accompanied the arrival of foreign investors wishing to take advantage of sports betting wagering.

Industry professionals state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the organization 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 launched in 2015.

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

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a store network, not least because numerous clients still remain hesitant to invest online.

He said the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting shops often function as social hubs where consumers can see 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 view 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 fixated on a TV screen inside. He said he started gambling three months back and bets as much as 1,000 naira a day.

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