By Alexis Akwagyiram and Didi Akinyelure

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

For years, mobile payments stopped working to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have actually cultivated a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have actually held Nigerian online customers back but wagering firms says the new, fast digital payment systems underpinning their sites are changing attitudes towards online deals.

"We have seen significant growth in the number of payment solutions that are available. All that is certainly changing the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is quicker, whoever can link to their platform with less problems and glitches," he said, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has actually been matched by a rise 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 an overall 132 billion naira ($420 million). Transactions jumped 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, rising cellphone use and falling data expenses, Nigeria has long been seen as a terrific chance for online businesses - once customers feel comfy with electronic payments.

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

British online sports betting firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

"There is a gradual 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 business to grow. These technological shifts encouraged Betway to start running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria's participation on the planet Cup state they are finding the payment systems developed by regional startups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform utilized by businesses running in Nigeria.

"We added Paystack as one of our payment choices with no fanfare, without revealing to our customers, and within a month it shot up to the top most pre-owned payment option on the website," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the country's second most significant wagering company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative considering that it was added in late 2017.

Paystack was set up by 2 Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from investors 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 stated an environment of developers had actually emerged around Paystack, developing software application to integrate the platform into sites. "We have actually seen a development because community and they have actually carried us along," stated Quartey.

Paystack said it allows payments for a variety of sports betting firms however likewise a large range of businesses, from energy services to transfer business 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 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 wanting to tap into sports betting wagering.

Industry specialists say the sector creates 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 both set up in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split between shops and online however the ease of electronic payments, cost of running stores and capability for clients to avoid the stigma of gambling in public implied online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least since lots of consumers still stay unwilling to invest online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian wagering stores typically act as social centers where clients can see soccer complimentary of charge while placing bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a television screen inside. He stated he started sports betting 3 months ago and bets as much as 1,000 naira a day.

"Since I have actually been playing I have not won anything but I believe that one day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)