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 companies that are starting to make online organizations more feasible.

For years, mobile payments failed to take off 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 customers back however sports betting firms says the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards online transactions.

"We have seen significant development in the variety of payment services that are offered. All that is absolutely 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 quicker, whoever can connect to their platform with less problems and glitches," he said, including that taxes from sports betting wagering in Lagos State rose 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 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 very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, increasing smart phone usage and falling data expenses, Nigeria has long been viewed as a terrific opportunity for online organizations - once consumers feel comfy with electronic payments.

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

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

"There is a steady shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

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

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's involvement worldwide Cup say they are finding 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 providing competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by services operating in Nigeria.

"We included Paystack as one of our payment options with no excitement, without revealing to our customers, and within a month it shot up to the number one most used payment choice on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country's 2nd most significant wagering firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice considering that it was included late 2017.

Paystack was set up by two Nigerian computer technology 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 financiers including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, stated the number of regular monthly transactions 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 each and every single month," stated Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it makes it possible for payments for a variety of wagering companies but likewise a wide variety of services, from energy services to transfer business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to venture 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 corresponded with the arrival of foreign investors hoping to use sports betting.

Industry experts say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both established 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 company introduced in 2015.

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

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a store network, not least due to the fact that many consumers still stay reluctant to spend online.

He stated the business, 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 view soccer free of charge while placing bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He said he started sports betting three months back 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 a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)