By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are beginning to make online organizations more feasible.

For many years, mobile payments stopped working 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 internet speeds have held Nigerian online consumers back however wagering firms states the brand-new, fast digital payment systems underpinning their websites are changing mindsets towards online deals.

"We have seen considerable growth in the variety of payment solutions that are available. All that is absolutely altering the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

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

That growth has actually 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 certified banks.

In 2016, there were 14 million web payments worth a total 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 nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing cellphone usage and falling data costs, Nigeria has actually long been viewed as a fantastic opportunity for online organizations - once customers feel comfy with electronic payments.

Online sports betting firms say that is occurring, though reaching the 10s of countless Nigerians without access to banking services stays a difficulty for pure online sellers.

British online wagering firm Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

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

"The growth in the number of fintechs, and the government as an enabler, has actually helped the company to grow. These technological shifts motivated Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's participation on the planet Cup say they are discovering the payment systems created by regional start-ups such as Paystack are showing popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the main platform used by companies operating in Nigeria.

"We added Paystack as one of our payment choices with no excitement, without announcing to our customers, and within a month it shot up to the primary most pre-owned payment alternative on the site," said Akin Alabi, creator of NairabBET.

He said NairaBET, the country's second greatest sports betting firm, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative considering that it was included in late 2017.

Paystack was set up by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from financiers including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, stated 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 development.

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

Paystack said it makes it possible for payments for a variety of wagering firms but likewise a wide variety of services, from energy services to transport companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program along with investor Greycroft Partners and Green Visor 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 financiers hoping to use sports betting wagering.

Industry professionals state the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the service is more developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up 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 launched in 2015.

NairaBET's Alabi said its sales were split between stores and online but the ease of electronic payments, expense of running shops and capability for consumers to prevent the stigma of sports betting in public suggested online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least due to the fact that lots of clients still remain hesitant to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian sports betting shops often function as social hubs where clients 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 view Nigeria's final warm up game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he began gambling 3 months back and bets approximately 1,000 naira a day.

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