By Alexis Akwagyiram and Didi Akinyelure

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

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 cash transfers have fostered a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have actually held Nigerian online customers back however sports betting companies says the new, fast digital payment systems underpinning their websites are altering mindsets towards online transactions.

"We have actually seen significant development in the variety of payment solutions that are available. All that is certainly altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is much faster, whoever can link to their platform with less issues and problems," 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 an increase in web payments, according to information 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 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 mobile phone use and falling information costs, Nigeria has actually long been seen as a terrific chance for online businesses - once consumers feel comfortable with electronic payments.

Online sports betting firms say that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays an obstacle for pure online merchants.

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

"There is a gradual shift to online now, that is where the industry 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 encouraged Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze worked up by Nigeria's involvement on the planet Cup state they are finding the payment systems developed by local startups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by services operating in Nigeria.

"We included Paystack as one of our payment choices without any excitement, without announcing to our customers, and within a month it shot up to the top most pre-owned payment choice on the website," said Akin Alabi, creator of NairabBET.

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

Paystack was set up by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage 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 mad Ikeja district of Lagos, said the number of 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 stated an environment of designers had actually emerged around Paystack, producing software to integrate the platform into sites. "We have actually seen a growth in that community and they have actually carried us along," stated Quartey.

Paystack said it allows payments for a number of wagering firms however also a large range of businesses, from energy services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to endeavor capitalists 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 corresponded with the arrival of foreign financiers hoping to tap into sports betting.

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 the company is more developed.

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last 2 years while Italy's Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, expense of running stores and ability for consumers to avoid the stigma of sports betting in public indicated online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a store network, not least because many customers still remain unwilling to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian wagering shops frequently act as social centers where clients can view soccer complimentary of charge while positioning bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a television screen inside. He stated he started betting three months back and bets up to 1,000 naira a day.

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