By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back but sports betting companies says the new, quick digital payment systems underpinning their sites are changing attitudes towards online transactions.

"We have seen significant growth in the variety of payment options that are offered. All that is definitely altering the gaming area," 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 link to their platform with less issues and problems," he stated, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development 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 reserve bank and licensed 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 almost 10 million worth 61 billion.

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

Online sports betting companies say that is happening, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online sellers.

British online sports betting firm 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 gradual shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The development in the variety of fintechs, and the federal government as an enabler, has actually assisted the business to prosper. These technological shifts encouraged Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's involvement in the World Cup state they are discovering the payment systems developed by regional startups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both established in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by companies operating in Nigeria.

"We added Paystack as one of our payment choices without any fanfare, without revealing to our consumers, and within a month it shot up to the top most used payment alternative on the website," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's 2nd greatest wagering company, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option given that it was included late 2017.

Paystack was established 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 investors consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, said the number 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 single month," said Emmanuel Quartey, Paystack's head of development.

He said an ecosystem of designers had emerged around Paystack, developing software to integrate the platform into websites. "We have seen a growth because neighborhood and they have carried us along," stated Quartey.

Paystack stated it allows payments for a number of sports betting companies but also a wide variety of companies, from utility services to carry companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme 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 investors intending to tap into sports betting wagering.

Industry experts state the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the organization 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 trend, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi said its sales were divided in between shops and online however the ease of electronic payments, expense of running stores and ability for customers to avoid the preconception of gambling in public indicated online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least due to the fact that numerous customers still stay hesitant to spend online.

He said the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting stores often function as social hubs where consumers can see soccer free of charge while putting bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He stated he began gambling 3 months back and bets approximately 1,000 naira a day.

"Since I have been playing I have not won anything however I think that a person day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)