By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic fraud and sluggish web speeds have actually held Nigerian online consumers back but wagering companies says the brand-new, fast digital payment systems underpinning their websites are changing mindsets towards online deals.

"We have actually seen significant growth in the number of payment services that are offered. All that is certainly changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will choose whoever is faster, whoever can connect to their platform with less issues and problems," he said, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has actually been matched by an increase in web payments, according to data 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 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 almost 190 million, rising mobile phone use and falling information expenses, Nigeria has actually long been seen as a great chance for online businesses - once customers feel comfortable with electronic payments.

Online gambling companies state that is taking place, though reaching the 10s of countless Nigerians without access to banking services remains a challenge for pure online sellers.

British online wagering firm Betway opened its 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 market is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The development in the variety of fintechs, and the government as an enabler, has actually helped the company to prosper. These technological shifts motivated Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze whipped up by Nigeria's involvement on the planet Cup state they are discovering the payment systems produced by regional startups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was established in 2002 and was the main platform used by services running in Nigeria.

"We added Paystack as one of our payment alternatives without any fanfare, without revealing to our clients, and within a month it soared to the number one most secondhand payment alternative on the website," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second greatest wagering firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was added in late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage 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 mad Ikeja district of Lagos, said the variety of monthly 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 single month," said Emmanuel Quartey, Paystack's head of development.

He stated an environment of developers had actually emerged around Paystack, creating software application to integrate the platform into websites. "We have actually seen a growth in that community and they have actually brought us along," said Quartey.

Paystack said it makes it possible for payments for a variety of sports betting firms however also a large range of services, from energy services to transport business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program along with venture 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 actually accompanied the arrival of foreign investors wishing to take advantage of sports betting wagering.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

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

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least because lots of consumers still remain reluctant to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering stores frequently act as social hubs where consumers can enjoy soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria's final heat up game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He stated he started sports betting three months ago and bets approximately 1,000 naira a day.

"Since I have 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; editing by David Clarke)