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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation firms that are beginning to make online organizations more practical.
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For 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 cultivated a culture of cashless payments.

Fear of electronic scams and slow web speeds have actually held Nigerian online consumers back however sports betting companies says the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

"We have seen considerable development in the variety of payment options that are offered. All that is definitely altering the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will go with whoever is faster, whoever can connect to their platform with less problems and glitches," he stated, 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 a rise in web payments, according to information 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 leapt 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 nearly 190 million, increasing cellphone usage and falling data expenses, Nigeria has actually long been viewed as a fantastic chance for online businesses - once customers feel comfortable with electronic payments.

Online gambling companies say that is happening, though reaching the 10s of millions of Nigerians without access to banking services stays a difficulty for pure online retailers.

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

"The development in the number of fintechs, and the government as an enabler, has helped the company to prosper. These technological shifts motivated Betway to begin operating in Nigeria," he said.
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FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria's involvement in the World Cup say they are discovering the payment systems created by local start-ups such as Paystack are showing popular online.
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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 utilized by services operating in Nigeria.

"We included Paystack as one of our payment choices with no excitement, without revealing to our clients, and within a month it shot up to the top most secondhand payment option on the site," said Akin Alabi, founder of NairabBET.

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

Paystack was established by 2 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 consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic 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 every single month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it makes it possible for payments for a variety of sports betting companies however likewise a vast array of organizations, from utility services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur 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 actually accompanied the arrival of foreign financiers hoping to use sports betting wagering.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET's Alabi stated its sales were split between shops and online however the ease of electronic payments, expense of running shops and capability for customers to avoid the stigma of gaming in public implied online transactions would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least since numerous customers still stay reluctant to spend online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering stores typically serve as social centers where customers can see soccer free of charge while positioning bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to watch Nigeria's final warm up game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a television screen inside. He stated he started 3 months earlier and bets up to 1,000 naira a day.

"Since I have actually been playing I have actually 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