By Alexis Akwagyiram and Didi Akinyelure

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

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 actually promoted a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online consumers back but sports betting companies states the new, quick digital payment systems underpinning their sites are altering mindsets towards online deals.

"We have actually seen substantial development in the variety of payment solutions that are offered. All that is certainly changing the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will choose whoever is much faster, whoever can link to their platform with less issues and glitches," he said, adding 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 an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve 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 first quarter of 2018 there were almost 10 million worth 61 billion.

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

Online gambling companies state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online retailers.

British online wagering company Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced 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 said.

"The development in the number of fintechs, and the government as an enabler, has helped business to grow. These technological shifts encouraged Betway to start running in Nigeria," he said.

FINTECH COMPETITION

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

Paystack and another local startup 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 services running in Nigeria.

"We included Paystack as one of our payment choices with no excitement, without revealing to our clients, and within a month it shot up to the top most used payment alternative on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's 2nd biggest sports betting company, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was added in late 2017.

Paystack was established by 2 Nigerian computer system science 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 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 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 each and every single month," stated Emmanuel Quartey, Paystack's head of growth.

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

Paystack stated it enables payments for a variety of sports betting firms however also a broad variety of companies, from energy services to carry companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as 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 accompanied the arrival of foreign financiers wishing to tap into sports betting.

Industry experts state the sector generates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the organization is more established.

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 firm released in 2015.

NairaBET's Alabi said its sales were split in between shops and online however the ease of electronic payments, expense of running stores and ability for clients to avoid 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 - said it was very important to have a store network, not least due to the fact that many clients still remain hesitant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian sports betting shops typically function as social hubs where customers can view soccer totally free of charge while positioning bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he started gambling 3 months earlier and bets up to 1,000 naira a day.

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