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 established by homegrown technology firms that are starting to make online services more viable.

For 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 actually cultivated a culture of cashless payments.

Fear of electronic scams and slow internet speeds have actually held Nigerian online consumers back but sports betting firms says the brand-new, fast digital payment systems underpinning their sites are changing attitudes towards online transactions.

"We have seen considerable growth in the variety of payment options that are readily available. All that is absolutely changing the 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 faster, whoever can connect to their platform with less concerns and glitches," he said, 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 a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and licensed 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, rising smart phone use and falling information expenses, Nigeria has actually long been viewed as a terrific chance for online organizations - once customers feel comfy with electronic payments.

Online gaming firms state that is happening, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online retailers.

British online sports betting company Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released 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 stated.

"The development in the variety of fintechs, and the government as an enabler, has assisted business to prosper. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy worked up by Nigeria's participation worldwide Cup say they are finding the payment systems created by regional start-ups such as Paystack are proving popular online.

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

"We added Paystack as one of our payment options with no fanfare, without revealing to our consumers, and within a month it soared to the top most secondhand payment choice on the site," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's 2nd biggest sports betting firm, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment choice because it was included late 2017.

Paystack was established by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early phase 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, said the number of monthly deals it processed increased 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," said Emmanuel Quartey, Paystack's head of development.

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

Paystack said it enables payments for a number of sports betting firms however likewise a wide variety of companies, from energy services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 accompanied the arrival of foreign investors hoping to tap into sports betting wagering.

Industry experts say the sector generates 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 was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi said its sales were split in between stores and online but the ease of electronic payments, cost of running stores and capability for customers to avoid the preconception of gaming 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 very important to have a store network, not least due to the fact that lots of customers still remain reluctant to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering stores typically act as social hubs where clients can see soccer totally free of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to view Nigeria's last warm up game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He said he began gambling 3 months earlier and bets approximately 1,000 naira a day.

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