By Alexis Akwagyiram and Didi Akinyelure

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

For 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 cultivated a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have actually held Nigerian online consumers back however wagering companies states the brand-new, quick digital payment systems underpinning their sites are changing mindsets towards online deals.

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

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

That growth has actually been matched by a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 almost 190 million, increasing smart phone use and falling information expenses, Nigeria has actually long been seen as a terrific opportunity for online businesses - once customers feel comfortable with electronic payments.

Online gambling companies say that is occurring, though reaching the 10s of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

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

"There is a progressive 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 federal government as an enabler, has helped the business to prosper. These technological shifts motivated Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

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

Paystack and another regional start-up Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by companies running in Nigeria.

"We included Paystack as one of our payment options with no excitement, without revealing to our consumers, and within a month it soared to the top most pre-owned payment alternative on the site," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's second most significant sports betting firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included late 2017.

Paystack was established by 2 Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who got early phase financing 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 frenetic Ikeja district of Lagos, stated the variety 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 every single month," stated Emmanuel Quartey, Paystack's head of development.

He stated an ecosystem of designers had emerged around Paystack, producing software to integrate the platform into websites. "We have actually seen a growth in that community and they have brought us along," stated Quartey.

Paystack stated it enables payments for a number of wagering companies however likewise a wide variety of services, from energy services to transport 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 accompanied the arrival of foreign financiers intending to take advantage of sports betting wagering.

Industry specialists say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where business is more established.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET's Alabi said 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 indicated online transactions would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was crucial to have a shop network, not least since many clients still remain reluctant to invest online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering stores frequently serve as social hubs where customers can enjoy soccer free of charge while putting bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he started sports betting three months earlier and bets approximately 1,000 naira a day.

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