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

For years, mobile payments stopped working to remove 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 fraud and slow internet speeds have held Nigerian online customers back however wagering firms states the brand-new, quick digital payment systems underpinning their sites are changing attitudes towards online deals.

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

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

That development has been matched by a rise 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing smart phone usage and falling data costs, Nigeria has actually long been viewed as a great chance for online companies - once consumers feel comfy with electronic payments.

Online gambling firms state that is happening, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

British online wagering firm 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 progressive shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.

"The growth in the variety of fintechs, and the federal government as an enabler, has assisted the company to prosper. These technological shifts motivated Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation on the planet Cup say they are finding the payment systems created by regional startups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment choices with no fanfare, without revealing to our clients, and within a month it soared to the number one most used payment option on the website," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country's 2nd most significant wagering company, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was included late 2017.

Paystack was set up by 2 Nigerian computer 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 investors including 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 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 development.

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

Paystack said it enables payments for a number of wagering companies however likewise a large range of businesses, from energy services to transfer business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as venture 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 coincided with the arrival of foreign investors 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 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 company introduced in 2015.

NairaBET's Alabi stated its sales were split in between stores and online but the ease of electronic payments, expense of running shops and capability for customers to prevent the preconception of gambling in public implied online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least due to the fact that lots of consumers still remain unwilling to spend online.

He said the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting shops frequently serve as social hubs where clients can view soccer complimentary of charge while putting bets.

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

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He said he began sports betting three months earlier and bets up to 1,000 naira a day.

"Since I have actually been playing I have actually not won anything but I think 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)