By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation companies that are starting to make online businesses more practical.

For several years, mobile payments failed to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have cultivated a culture of cashless payments.
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Fear of electronic fraud and sluggish internet speeds have held Nigerian online customers back but wagering firms states the brand-new, fast digital payment systems underpinning their websites are changing attitudes towards online transactions.

"We have actually seen considerable growth in the variety of payment solutions that are readily available. All that is definitely changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is quicker, whoever can link to their platform with less problems and problems," he said, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development 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 certified banks.
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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 almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone use and falling data expenses, Nigeria has long been seen as a great chance for online organizations - once consumers feel comfortable with electronic payments.

Online gaming firms state that is taking place, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

British online wagering company Betway opened its first 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 market is going," Betway's Nigeria manager Lere Awokoya stated.

"The development in the variety of fintechs, and the federal government as an enabler, has actually assisted the service to grow. These technological shifts motivated Betway to start running in Nigeria," he said.

FINTECH COMPETITION
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sports betting firms capitalizing the soccer craze whipped up by Nigeria's involvement worldwide Cup say they are discovering the payment systems created by regional startups such as Paystack are showing popular online.

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

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

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

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase funding 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 number of month-to-month deals it processed rose from about 8,000 in early 2016 to more than 900,000 since June 2018.
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"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 stated an environment of designers had emerged around Paystack, producing software application to integrate the platform into websites. "We have seen a growth in that community and they have actually carried us along," said Quartey.

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

Flutterwave, co-founded by Nigerian entrepreneur 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 in 2015.
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FOREIGN INVESTMENT
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Shifts in Nigeria's payment culture have actually coincided with the arrival of foreign financiers wanting to tap into sports betting.

Industry experts 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 established.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet led 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 between stores and online however the ease of electronic payments, expense of running stores and ability for clients to prevent the preconception of sports betting in public suggested online transactions would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a shop network, not least due to the fact that lots of customers still stay hesitant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting stores typically serve as social centers where clients can see soccer totally free of charge while putting bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria's final warm up video game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a television screen inside. He stated he began gambling three months earlier 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos