By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation firms that are starting to make online businesses more feasible.
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For several years, mobile payments stopped working to take off 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 fraud and sluggish web speeds have held Nigerian online consumers back however sports betting firms says the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards .

"We have actually seen significant development in the variety of payment services that are readily available. All that is certainly changing the 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 much faster, whoever can link to their platform with less problems and glitches," he stated, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
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That development has actually been matched by an increase in web payments, according to data 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 nearly 10 million worth 61 billion.

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

Online sports betting firms say that is occurring, though reaching the tens of millions of Nigerians without access to banking services stays a difficulty for pure online sellers.

British online sports betting company Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

"There is a steady 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 actually helped business to grow. These technological shifts encouraged Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's involvement worldwide Cup state they are discovering the payment systems produced by local start-ups such as Paystack are showing popular online.

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

"We added Paystack as one of our payment alternatives with no fanfare, without announcing to our customers, and within a month it shot up to the top most secondhand payment option on the site," said Akin Alabi, creator of NairabBET.

He said NairaBET, the country's second greatest sports betting firm, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice since it was included late 2017.

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from financiers consisting of China's Tencent and Comcast Ventures in the United States.
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Paystack, based in the frenetic Ikeja district of Lagos, stated the variety of monthly transactions it processed rose 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.
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He stated an environment of designers had actually emerged around Paystack, producing software application to incorporate the platform into sites. "We have seen a development in that community and they have actually carried us along," stated Quartey.

Paystack said it enables payments for a number of sports betting companies however also a vast array of companies, from utility services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as venture capitalists 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 accompanied the arrival of foreign financiers hoping to take advantage of 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 business is more established.

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

NairaBET's Alabi said its sales were split between shops and online but the ease of electronic payments, expense of running stores and capability for customers to prevent the stigma of sports betting in public implied online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a shop network, not least since many clients still stay reluctant to spend online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering stores typically act as social centers where clients can enjoy soccer complimentary of charge while placing bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's last warm up video 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 began sports betting three months ago and bets approximately 1,000 naira a day.

"Since I have actually been playing I have actually not won anything however I think 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)