By Alexis Akwagyiram and Didi Akinyelure

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

For several years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.
bet9ja.com
Fear of electronic scams and sluggish web speeds have held Nigerian online consumers back however sports betting companies says the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.
bit.ly
"We have actually seen significant development in the number of payment solutions that are readily available. All that is certainly changing the gaming space," stated 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 connect to their platform with less issues and glitches," he said, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
bet9ja.com
That growth 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 licensed banks.
bet9ja.com
In 2016, there were 14 million web payments worth an overall 132 billion naira ($420 million). Transactions jumped to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, rising mobile phone use and falling information costs, Nigeria has long been viewed as a great opportunity for online companies - once customers feel comfortable with electronic payments.

Online sports betting firms state that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online merchants.
bit.ly
British online wagering firm Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released 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 stated.

"The growth in the variety of fintechs, and the federal government as an enabler, has helped business to grow. These technological shifts encouraged Betway to start operating in Nigeria," he said.
bet9ja.com
FINTECH COMPETITION

sports betting companies capitalizing the soccer craze worked up by Nigeria's participation worldwide Cup state they are finding the payment systems created by local start-ups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are offering competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by services running in Nigeria.

"We included Paystack as one of our payment options with no fanfare, without revealing to our consumers, and within a month it shot up to the top most secondhand payment choice on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second greatest sports betting company, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was added in late 2017.

Paystack was established by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got 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.

Paystack, based in the mad Ikeja district of Lagos, stated the number 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 each and every single month," said Emmanuel Quartey, Paystack's head of development.

He stated an ecosystem of designers had actually emerged around Paystack, creating software to integrate the platform into sites. "We have actually seen a development in that community and they have actually carried us along," stated Quartey.

Paystack stated it enables payments for a variety of sports betting firms but likewise a large range of organizations, from utility services to transfer companies to insurer Axa Mansard.
bet9ja.com
Flutterwave, co-founded by Nigerian business owner 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have corresponded with the arrival of foreign investors hoping to tap into sports betting wagering.

Industry specialists say the sector generates 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 actually both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi stated its sales were divided between shops and online however the ease of electronic payments, cost of running shops and capability for customers to prevent the preconception of gambling in public suggested 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 many clients still stay unwilling to invest online.

He said the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering shops often function as social centers where consumers can watch soccer free of charge while placing bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He stated he started gambling three months back and bets as much as 1,000 naira a day.

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