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 developed by homegrown technology companies that are starting to make online companies more practical.

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

Fear of electronic scams and slow internet speeds have held Nigerian online consumers back however sports betting firms states the brand-new, fast digital payment systems underpinning their sites are changing mindsets towards online transactions.

"We have seen significant development in the number of payment services that are available. All that is absolutely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

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

That development has been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 almost 190 million, rising smart phone usage and falling data expenses, Nigeria has long been viewed as a fantastic opportunity for online services - once consumers feel comfy with electronic payments.

Online gambling companies state that is occurring, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

British online sports betting company Betway opened its first African business 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 market is going," Betway's Nigeria manager Lere Awokoya said.

"The growth in the number of fintechs, and the government as an enabler, has helped the organization to flourish. These technological shifts encouraged Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's participation in the World Cup say they are discovering the payment systems created by regional start-ups such as Paystack are showing popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are supplying 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 options without any excitement, without announcing to our clients, and within a month it shot up to the primary most used payment choice on the site," said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's 2nd greatest sports betting company, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice because it was included late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley's Y-Combinator program.

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 frenetic Ikeja district of Lagos, said the number of regular monthly 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 stated an ecosystem of developers had emerged around Paystack, developing software to integrate the platform into websites. "We have actually seen a development because neighborhood and they have actually carried us along," stated Quartey.

Paystack said it makes it possible for payments for a number of sports betting firms however likewise a wide variety of businesses, from energy services to transport companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to endeavor capitalists 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.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both set up 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 firm introduced in 2015.

NairaBET's Alabi said its sales were divided between stores and online however the ease of electronic payments, expense of running stores and ability for consumers to prevent the stigma of gambling in public suggested online deals would grow.

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

He stated the business, 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 clients can view soccer complimentary of charge while positioning bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to enjoy Nigeria's final warm up video 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 said he started gambling 3 months ago and bets approximately 1,000 naira a day.

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