By Alexis Akwagyiram and Didi Akinyelure
bit.ly
LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria mostly thanks to payment systems established by homegrown technology companies that are beginning to make online services more viable.
bit.ly
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 promoted a culture of cashless payments.

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

"We have seen substantial development in the number of payment options that are available. All that is certainly altering the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

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

That development 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 main bank and certified 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 nearly 10 million worth 61 billion.

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

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

British online sports betting company Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

"There is a progressive shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya said.

"The growth in the number of fintechs, and the federal government as an enabler, has actually assisted business to prosper. These technological shifts motivated Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's involvement in the World Cup say they are finding the payment systems produced by regional start-ups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both established 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 added Paystack as one of our payment choices without any fanfare, without revealing to our customers, and within a month it soared to the number one most secondhand payment alternative on the site," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country's 2nd greatest wagering firm, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment option since it was included in 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 investors consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the number of regular monthly deals it processed rose 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 month," stated Emmanuel Quartey, Paystack's head of growth.

He said a community of developers had emerged around Paystack, developing software application to integrate the platform into sites. "We have actually seen a growth because community and they have brought us along," stated Quartey.

Paystack said it allows payments for a variety of wagering companies but also a wide range of organizations, from energy services to transfer companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to venture capitalists 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 actually accompanied the arrival of foreign investors wishing to use sports betting wagering.

Industry experts say the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the 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 released in 2015.

NairaBET's Alabi stated its sales were split between shops and online but the ease of electronic payments, expense of running shops and ability for clients to prevent the preconception of gaming in public suggested online deals would grow.

But in spite of advances in digital payments, - chairman and co-founder of Bet9ja - stated it was essential to have a store network, not least due to the fact that many customers 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 sports betting stores often function as social hubs where clients can see soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to enjoy Nigeria's final heat up 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 said he started gambling 3 months ago and bets approximately 1,000 naira a day.

"Since I have been playing I have actually 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