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By and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are beginning to make online services more feasible.

For many years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have fostered a culture of cashless payments.

Fear of electronic scams and slow web speeds have held Nigerian online consumers back however wagering firms states the new, quick digital payment systems underpinning their sites are altering mindsets towards online deals.

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

"The operators will choose whoever is faster, whoever can link to their platform with less concerns and glitches," he said, including that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
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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 central bank and certified 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 first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising smart phone use and falling data expenses, Nigeria has long been seen as a terrific chance for online businesses - once customers feel comfortable 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 a challenge for pure online retailers.

British online sports betting company Betway opened its first African business 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 market is going," Betway's Nigeria manager Lere Awokoya said.

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

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's involvement in the World Cup state they are finding the payment systems produced by local start-ups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by organizations running in Nigeria.

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

He stated NairaBET, the country's 2nd greatest wagering company, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option considering that it was included late 2017.

Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase 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 month-to-month deals 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 each and every single month," stated Emmanuel Quartey, Paystack's head of growth.
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He said an ecosystem of designers had emerged around Paystack, creating software to incorporate the platform into websites. "We have seen a development because community and they have actually brought us along," stated Quartey.

Paystack stated it makes it possible for payments for a number of sports betting firms however also a wide variety of services, from utility services to transfer business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as endeavor 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 take advantage of sports betting wagering.

Industry professionals say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where business is more developed.

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

NairaBET's Alabi stated its sales were split in between stores and online but the ease of electronic payments, expense of running shops and capability for clients to prevent the stigma of gaming in public meant online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a store network, not least since lots of clients still stay reluctant to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops typically act as social centers where clients can see soccer complimentary of charge while positioning bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to view Nigeria's final heat up game before the World Cup.

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He said he began sports betting three months earlier and bets approximately 1,000 naira a day.

"Since I have actually been playing I have not won anything however I believe that one day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos