By Alexis Akwagyiram and Didi Akinyelure

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

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

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

"We have seen considerable growth in the variety of payment solutions that are available. All that is certainly changing the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will choose whoever is faster, whoever can link to their platform with less concerns and problems," he said, including that taxes from sports betting wagering 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 main 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 almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone use and falling data costs, Nigeria has long been viewed as a terrific chance for online organizations - once consumers feel comfortable with electronic payments.

Online gambling firms state that is happening, though reaching the 10s of millions of Nigerians without access to banking services remains a difficulty for pure online retailers.

British online sports betting firm Betway opened its very first African organization 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 manager Lere Awokoya stated.

"The growth in the number of fintechs, and the government as an enabler, has actually helped the company to grow. These technological shifts encouraged Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's participation worldwide Cup say they are finding the payment systems created by regional start-ups such as Paystack are proving popular online.

Paystack and another regional 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 services running in Nigeria.

"We included Paystack as one of our payment options without any fanfare, without announcing to our customers, and within a month it shot up to the primary most used payment choice on the website," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's 2nd biggest sports betting firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative considering that it was included late 2017.

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley's Y-Combinator program.

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, stated the variety of monthly transactions it processed increased 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 month," stated Emmanuel Quartey, Paystack's head of development.

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

Paystack said it allows payments for a variety of wagering companies however likewise a vast array of companies, from utility services to carry companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program in addition to investor 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 corresponded with the arrival of foreign investors hoping to take advantage of 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 business is more established.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi said its sales were split in between shops and online but the ease of electronic payments, expense of running shops and ability for customers to prevent the stigma of gaming in public indicated online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a shop network, not least since numerous clients still remain unwilling to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian sports betting shops frequently function as social centers where consumers can see 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 see Nigeria's final warm up game before the World Cup.

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He stated he began sports betting 3 months earlier 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)