By Alexis Akwagyiram and Didi Akinyelure

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

For many years, mobile payments stopped working 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 fraud and sluggish web speeds have held Nigerian online customers back but sports betting companies states the new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

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

"The operators will opt for whoever is quicker, whoever can connect to their platform with less concerns and glitches," he stated, including that taxes from sports betting in Lagos State rose 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 central 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising mobile phone usage and falling information expenses, Nigeria has actually long been viewed as an excellent opportunity for online organizations - once customers feel comfortable with electronic payments.

Online gambling companies state that is happening, though reaching the tens of countless Nigerians without access to banking services stays a difficulty for pure online merchants.

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

"There is a gradual 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 government as an enabler, has helped the company to prosper. These technological shifts encouraged Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's participation on the planet Cup say they are discovering the payment systems created by regional startups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by organizations operating in Nigeria.

"We included Paystack as one of our payment options without any excitement, without revealing to our clients, and within a month it soared to the top most secondhand payment alternative on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's 2nd biggest wagering firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was included late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase funding in Silicon Valley's Y-Combinator programme.

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, stated the number of month-to-month 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 each and every single month," said Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of designers had actually emerged around Paystack, developing software application to integrate the platform into websites. "We have actually seen a development because community and they have actually carried us along," said Quartey.

Paystack stated it makes it possible for payments for a number of wagering companies but likewise a wide variety of businesses, from energy services to carry companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to 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 coincided with the arrival of foreign financiers wishing to take advantage of sports betting wagering.

Industry specialists say 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 developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi stated its sales were split in between stores and online however the ease of electronic payments, cost of running shops and ability for consumers to avoid the stigma of gambling 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 because numerous customers still stay hesitant to invest online.

He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops often act as social centers where customers can watch soccer free of charge while positioning bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He stated he started gambling three months ago and bets approximately 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," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)