By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting 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.

For 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 fostered a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back but sports betting firms says the brand-new, fast digital payment systems underpinning their websites are changing attitudes towards online transactions.

"We have actually seen substantial growth in the number of payment options that are offered. All that is certainly changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is much faster, whoever can link to their platform with less concerns and glitches," he stated, adding that taxes from in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development has been matched by a rise 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 a total 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising cellphone use and falling information costs, Nigeria has actually long been viewed as a terrific chance for online services - once consumers feel comfortable with electronic payments.

Online gaming firms state that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online merchants.

British online sports betting firm Betway opened its first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released 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 said.

"The growth in the variety of fintechs, and the federal government as an enabler, has helped business to prosper. These technological shifts motivated Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation in the World Cup state they are finding the payment systems developed by regional startups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the main platform used by services operating in Nigeria.

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

He said NairaBET, the nation's second most significant sports betting firm, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was added in late 2017.

Paystack was set up by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage funding in Silicon Valley's Y-Combinator program.
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In December 2016, it raised $1.3 million from investors consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, said the number of month-to-month transactions 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 every month," said Emmanuel Quartey, Paystack's head of growth.
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He stated an environment of developers had actually emerged around Paystack, producing software application to incorporate the platform into websites. "We have actually seen a growth because community and they have actually brought us along," stated Quartey.
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Paystack stated it enables payments for a variety of sports betting firms but likewise a wide variety of organizations, from energy 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 along with venture capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.
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FOREIGN INVESTMENT

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

Industry specialists state the sector generates about $1 billion a year and is most 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 two years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi stated its sales were split between shops and online but the ease of electronic payments, expense of running stores and ability for clients to prevent the stigma of gambling in public implied online transactions 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 due to the fact that numerous consumers still remain hesitant to invest online.

He said the company, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian sports betting shops typically act as social centers where customers can enjoy soccer free of charge while positioning bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a TV screen inside. He stated he started sports betting 3 months ago and bets as much as 1,000 naira a day.

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