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

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

"We have actually seen considerable development in the variety of payment solutions that are offered. All that is definitely changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will opt for whoever is much faster, whoever can connect to their platform with less issues and problems," he stated, including that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has actually been matched by a rise 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). 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 almost 190 million, increasing mobile phone usage and falling information expenses, Nigeria has long been viewed as a fantastic opportunity for online businesses - once consumers feel comfy with electronic payments.

Online gambling companies state that is happening, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle for pure online merchants.
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British online sports betting firm 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 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 government as an enabler, has actually assisted business to flourish. These technological shifts encouraged Betway to start operating in Nigeria," he said.
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FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's participation in the World Cup say they are discovering the payment systems produced by local startups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by companies running in Nigeria.

"We added Paystack as one of our payment alternatives without any excitement, without announcing to our consumers, and within a month it shot up to the primary most used payment option on the website," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country's second most significant 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 because it was added in late 2017.

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage 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 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 environment of developers had emerged around Paystack, producing software application to incorporate the platform into websites. "We have actually seen a growth because neighborhood and they have carried us along," stated Quartey.

Paystack stated it enables payments for a variety of sports betting companies however also a wide variety of services, from energy services to transport business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme 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 accompanied the arrival of foreign financiers intending to use sports betting wagering.

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 business is more developed.
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Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi said its sales were divided in between shops and online but the ease of electronic payments, cost of running stores and ability for consumers to prevent the preconception 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 necessary to have a store network, not least because numerous consumers still stay hesitant to spend online.
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He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering shops often act as social centers where consumers can enjoy soccer free of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to see Nigeria's final warm 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 started sports betting 3 months back and bets up to 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," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)
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