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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation companies that are beginning to make online services more viable.

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 fostered a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have actually held Nigerian online customers back however sports betting companies says the new, quick digital payment systems underpinning their sites are changing attitudes towards online deals.

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

"The operators will go with whoever is faster, whoever can link to their platform with less concerns and glitches," he said, adding that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
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That development has actually been matched by a rise in web payments, according to information 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 leapt to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing mobile phone use and falling data expenses, Nigeria has long been seen as a fantastic opportunity for online services - once consumers feel comfy with electronic payments.

Online gaming companies state that is taking place, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle for pure online merchants.

British online sports betting company Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.
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"There is a gradual shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya said.

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

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze worked up by Nigeria's involvement on the planet Cup state they are discovering the payment systems developed by local startups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by services operating in Nigeria.

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

He stated NairaBET, the country's 2nd biggest sports betting company, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative considering that it was added in late 2017.

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

In December 2016, it raised $1.3 million from investors consisting of Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the variety of regular monthly transactions 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 month," said Emmanuel Quartey, Paystack's head of development.

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

Paystack stated it makes it possible for payments for a number of sports betting firms however likewise a wide variety of businesses, from energy services to transport companies 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 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 coincided with the arrival of foreign financiers wanting to use sports betting wagering.

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

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.
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NairaBET's Alabi said its sales were split in between shops and online however the ease of electronic payments, cost of running stores and capability for consumers to avoid the preconception of sports betting in public indicated online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was crucial to have a shop network, not least since many customers still stay hesitant to spend online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering shops frequently serve as social hubs where customers can view soccer free of charge while placing bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans gathered to view Nigeria's final heat 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 said he started gambling 3 months earlier and bets approximately 1,000 naira a day.

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