By Alexis Akwagyiram and Didi Akinyelure

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

For several years, mobile payments failed to remove 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 scams and sluggish internet speeds have held Nigerian online customers back but wagering firms states the new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.

"We have actually seen considerable growth in the number of payment services that are offered. All that is definitely changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

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

That growth has been matched by an increase 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 an overall 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were nearly 10 million worth 61 billion.

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

Online gaming firms say that is occurring, though reaching the tens of countless Nigerians without access to banking services remains a challenge for pure online sellers.

British online sports betting company 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 market is going," Betway's Nigeria manager Lere Awokoya stated.

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

FINTECH COMPETITION

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

Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by companies running in Nigeria.

"We included Paystack as one of our payment choices with no excitement, without announcing to our clients, and within a month it shot up to the top most pre-owned payment choice on the site," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country's 2nd biggest wagering firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative considering that it was added in late 2017.

Paystack was established by two Nigerian computer technology 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, stated the number of regular monthly transactions 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 single month," said Emmanuel Quartey, Paystack's head of development.

He stated a community of developers had actually emerged around Paystack, developing software to incorporate the platform into sites. "We have actually seen a development because community and they have carried us along," stated Quartey.

Paystack stated it allows payments for a variety of sports betting firms however likewise a wide variety of services, from utility services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with investor 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 corresponded with the arrival of foreign financiers hoping to use sports betting.

Industry specialists say the sector produces 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 actually both set up in Nigeria in the last two years while Italy's Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi said its sales were divided between shops and online however the ease of electronic payments, cost of running shops and ability for clients to avoid the preconception of gambling in public meant online deals would grow.

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

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores typically function as social hubs where clients can watch soccer totally free of charge while positioning bets.

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

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a TV screen inside. He stated he started sports betting three 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 a person day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)