By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are beginning to make online organizations more practical.

For many years, mobile payments stopped working to take off 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 fraud and sluggish web speeds have actually held Nigerian online customers back however wagering firms says the new, quick digital payment systems underpinning their sites are altering attitudes towards online deals.

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

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

That growth has actually 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 certified 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 first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing cellphone usage and falling data expenses, Nigeria has long been seen as a fantastic opportunity for online businesses - once customers feel comfortable with electronic payments.

Online gaming companies say that is happening, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online merchants.

British online sports betting company Betway opened its very first African organization 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 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 assisted the company to flourish. These technological shifts encouraged Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's involvement in the World Cup state they are finding the payment systems developed by local start-ups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by services operating in Nigeria.

"We added Paystack as one of our payment choices with no excitement, without announcing to our customers, and within a month it shot up to the primary most secondhand payment choice on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's second biggest sports betting company, now had 2 million routine consumers 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 set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley's Y-Combinator program.

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 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 month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it allows payments for a variety of sports betting companies but also a large range of companies, from utility services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 coincided with the arrival of foreign investors wanting to take advantage of sports betting wagering.

Industry professionals 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 developed.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET's Alabi stated its sales were divided between stores and online but the ease of electronic payments, expense of running stores and capability for customers to prevent the preconception of gaming 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 essential to have a shop network, not least since lots of clients still stay reluctant to invest online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting stores often serve as social hubs where consumers can watch soccer free of charge while positioning bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to watch 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 TV screen inside. He said he began gambling three months back and bets approximately 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)