By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology firms that are starting to make online companies more viable.

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

Fear of electronic fraud and slow web speeds have actually held Nigerian online consumers back however wagering companies says the new, fast digital payment systems underpinning their websites are altering attitudes towards online deals.

"We have actually seen significant development in the variety of payment services that are readily available. All that is certainly changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is quicker, whoever can link to their platform with less concerns and glitches," he said, including that taxes from sports betting wagering 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 data 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 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 cellphone use and falling data costs, Nigeria has actually long been seen as a fantastic chance for online organizations - once consumers feel comfy with electronic payments.

Online gambling firms state that is happening, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online merchants.

British online wagering company 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 steady 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 federal government as an enabler, has assisted the organization to grow. These technological shifts motivated Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's involvement on the planet Cup state they are discovering the payment systems created by regional startups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by organizations running in Nigeria.

"We included Paystack as one of our payment options with no excitement, without revealing to our clients, and within a month it soared to the primary most used payment choice on the website," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's second greatest wagering firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option considering that it was included late 2017.

Paystack was set up by two 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 financiers including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, said the variety of month-to-month deals it processed increased 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," stated Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of developers had actually emerged around Paystack, producing software to incorporate the platform into websites. "We have seen a development because neighborhood and they have actually brought us along," stated Quartey.

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

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also 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 accompanied the arrival of foreign investors wanting to tap into sports betting.

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

NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, expense of running shops and capability for customers to avoid the stigma of sports betting in public indicated online transactions would grow.

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

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

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria's last heat up game before the World Cup.

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He stated he started 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 however I believe 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)