By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems established by homegrown technology firms that are starting to make online services more viable.

For several years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have actually cultivated a culture of cashless payments.

Fear of electronic fraud and slow web speeds have held Nigerian online consumers back however wagering firms states the brand-new, fast digital payment systems underpinning their websites are altering attitudes towards online transactions.

"We have actually seen substantial growth in the number of payment options that are available. All that is certainly altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will go with whoever is quicker, whoever can connect to their platform with less concerns and glitches," he stated, including that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development 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 reserve bank and certified 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 first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, rising cellphone use and falling data costs, Nigeria has actually long been viewed as a fantastic chance for online companies - once consumers feel comfortable with electronic payments.

Online gambling companies say that is occurring, though reaching the tens of countless Nigerians without access to banking services remains an obstacle for pure online merchants.

British online sports betting firm Betway opened its very first African business 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 development in the number of fintechs, and the federal government as an enabler, has actually helped business to prosper. These technological shifts motivated Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy whipped up by Nigeria's participation worldwide Cup state they are discovering the payment systems created by local startups 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 main platform used by services operating in Nigeria.

"We included Paystack as one of our payment alternatives without any fanfare, without revealing to our clients, and within a month it soared to the primary most pre-owned payment option on the site," stated Akin Alabi, creator of NairabBET.

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

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 frenetic Ikeja district of Lagos, said the number of monthly transactions 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 each and every single month," stated Emmanuel Quartey, Paystack's head of growth.

He said a community of designers had actually emerged around Paystack, developing software to integrate the platform into sites. "We have seen a growth because community and they have brought us along," said Quartey.

Paystack stated it allows payments for a variety of wagering companies but also a large range of companies, from utility services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as endeavor capitalists 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 tap into sports betting wagering.

Industry professionals state the sector creates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service 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 trend, taking a half stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi stated its sales were split in between shops and online however the ease of electronic payments, cost of running stores and ability for customers to avoid the stigma of gaming in public meant online transactions would grow.

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

He stated the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian wagering stores often function as social hubs where clients can watch soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria's last warm 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 said he started sports betting 3 months earlier and bets up to 1,000 naira a day.

"Since I have been playing I have actually 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)