bet9ja.com
By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are beginning to make online businesses more viable.

For years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have cultivated a of cashless payments.

Fear of electronic scams and sluggish internet speeds have actually held Nigerian online customers back however sports betting firms states the brand-new, quick digital payment systems underpinning their websites are altering mindsets towards online transactions.

"We have seen significant growth in the variety of payment services that are available. All that is certainly altering the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is faster, whoever can connect to their platform with less concerns and problems," he stated, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.
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That growth has actually been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and licensed banks.

In 2016, there were 14 million web payments worth a total 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, increasing cellphone use and falling information costs, Nigeria has long been viewed as a great chance for online businesses - once consumers feel comfortable with electronic payments.

Online gaming companies state that is happening, though reaching the tens of countless Nigerians without access to banking services remains a challenge for pure online sellers.

British online sports betting firm Betway opened its very 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 Lere Awokoya stated.

"The development in the variety of fintechs, and the federal government as an enabler, has actually helped business to thrive. These technological shifts motivated Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's participation on the planet Cup say they are finding the payment systems produced by regional start-ups such as Paystack are proving popular online.
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Paystack and another local start-up Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by organizations running in Nigeria.

"We added Paystack as one of our payment choices with no fanfare, without announcing to our consumers, and within a month it soared to the top most used payment option on the site," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second greatest wagering company, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was included in 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 program.

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 number of monthly transactions it processed increased 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 month," said Emmanuel Quartey, Paystack's head of growth.

He said an environment of developers had actually emerged around Paystack, producing software to integrate the platform into sites. "We have seen a growth because community and they have carried us along," said Quartey.

Paystack stated it makes it possible for payments for a number of sports betting firms but likewise a vast array of companies, from energy services to transport companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to 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 accompanied the arrival of foreign investors wanting to tap into sports betting wagering.

Industry specialists say the sector produces 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 actually both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi stated its sales were split in between shops and online however the ease of electronic payments, expense of running shops and ability for customers to prevent the stigma of gambling in public meant online deals would grow.
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But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a store network, not least since numerous clients still stay hesitant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting shops often serve as social hubs where customers can view soccer free of charge while placing bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's last warm up video game before the World Cup.
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Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a television screen inside. He stated he began sports betting 3 months earlier and bets as much as 1,000 naira a day.

"Since I have actually been playing I have actually not won anything but I think that one 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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