By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation companies that are beginning to make online services more viable.
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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 actually fostered a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have held Nigerian online consumers back however wagering companies states the new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

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

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

That development has been matched by an increase in web payments, according to information 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). Transactions leapt 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 nearly 190 million, rising cellphone usage and falling information costs, Nigeria has long been seen as a great opportunity for online businesses - once customers feel comfortable with electronic payments.

Online sports betting companies say that is happening, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online sellers.

British online sports betting company Betway opened its first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 number of fintechs, and the government as an enabler, has actually assisted business to prosper. These technological shifts encouraged Betway to start running in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze whipped up by Nigeria's participation in the World Cup say they are finding the payment systems developed by regional start-ups such as Paystack are showing popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by businesses operating in Nigeria.

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

He stated NairaBET, the country's 2nd most significant wagering company, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option because it was included late 2017.

Paystack was set up by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early stage 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 mad Ikeja district of Lagos, said the variety of regular monthly transactions 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," said Emmanuel Quartey, Paystack's head of growth.

He said an environment of designers had actually emerged around Paystack, developing software to integrate the platform into websites. "We have seen a development because neighborhood and they have actually carried us along," stated Quartey.

Paystack said it allows payments for a variety of sports betting firms but likewise a vast array of companies, from energy services to transfer business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with investor Greycroft Partners and Capital and the Omidyar Network. It raised $10 million in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually accompanied the arrival of foreign investors wanting to take advantage of sports betting wagering.

Industry professionals state the sector creates about $1 billion a year and is most 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 established in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were divided in between shops and online however the ease of electronic payments, cost of running stores and capability for consumers to avoid the preconception of sports betting in public implied online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a store network, not least because numerous clients still remain reluctant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering stores frequently act as social centers where consumers can enjoy soccer complimentary of charge while placing bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He stated he began sports betting 3 months earlier 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)
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