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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology firms that are starting to make online companies more practical.
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For many years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have held Nigerian online customers back but wagering companies states the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online transactions.
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"We have seen substantial growth in the variety of payment services that are readily available. All that is absolutely altering the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

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

That growth 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 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, rising cellphone usage and falling information costs, Nigeria has long been seen as a terrific opportunity for online organizations - once consumers feel comfy with electronic payments.

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

British online sports betting company Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 growth in the variety of fintechs, and the federal government as an enabler, has actually assisted the business to flourish. These technological shifts motivated Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's participation worldwide Cup say they are discovering the payment systems developed by regional start-ups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by businesses 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 shot up to the top most pre-owned payment choice on the website," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's second greatest sports betting company, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was included late 2017.
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Paystack was set up by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator programme.

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 variety of regular monthly 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 each and every single month," stated Emmanuel Quartey, Paystack's head of growth.

He said a community of developers had emerged around Paystack, developing software application to integrate the platform into websites. "We have actually seen a development in that neighborhood and they have brought us along," said Quartey.

Paystack said it makes it possible for payments for a variety of sports betting firms but likewise a large variety of companies, from energy services to carry business to insurance company 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually corresponded with the arrival of foreign financiers wishing to take advantage of sports betting.

Industry experts state 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 firm launched in 2015.

NairaBET's Alabi said its sales were split in between shops and online but the ease of payments, cost of running shops and capability for consumers to avoid the stigma of gaming in public indicated online transactions 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 since many customers still stay reluctant to invest online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering stores often function as social hubs where customers can see soccer free of charge while positioning 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 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 began sports betting 3 months earlier and bets up to 1,000 naira a day.

"Since I have actually been playing I have 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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