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 businesses more viable.

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

Fear of electronic scams and slow internet speeds have actually held Nigerian online customers back however wagering firms says the brand-new, fast digital payment systems underpinning their websites are altering mindsets towards online deals.

"We have actually seen substantial development in the variety of payment solutions that are available. All that is definitely altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

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

That growth has 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 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 nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing smart phone use and falling data costs, Nigeria has actually long been seen as a fantastic chance for online organizations - once customers feel comfy with electronic payments.

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

British online wagering firm Betway opened its very first African company 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 development in the number of fintechs, and the government as an enabler, has helped the company to grow. These technological shifts encouraged Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's participation worldwide Cup state they are discovering the payment systems created by regional start-ups such as Paystack are proving popular online.

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

"We included Paystack as one of our payment options with no fanfare, without announcing to our clients, and within a month it soared to the number one most secondhand payment option on the site," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's 2nd greatest wagering company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was included late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got 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 transactions it processed rose from about 8,000 in early 2016 to more than 900,000 as of 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 a community of developers had emerged around Paystack, producing software to integrate the platform into websites. "We have actually seen a growth in that neighborhood and they have actually carried us along," said Quartey.

Paystack said it makes it possible for payments for a variety of wagering companies however likewise a wide variety of services, from utility services to transport business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program along with 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 actually corresponded with the arrival of foreign investors wanting to tap into sports betting wagering.

Industry professionals say the sector generates about $1 billion a year and is 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 led the trend, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi stated its sales were split in between shops and online but the ease of electronic payments, expense of running stores and ability for consumers to avoid the stigma of sports betting in public meant online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was important to have a store network, not least because numerous customers still stay unwilling to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores frequently act as social centers where clients can watch soccer free of charge while putting bets.

At a BetKing hall deep inside the bustling 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 TV screen inside. He said he began sports betting 3 months back and bets as much as 1,000 naira a day.

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