By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic fraud and slow web speeds have held Nigerian online consumers back however sports betting firms states the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.

"We have seen significant growth in the variety of payment services that are readily available. All that is certainly altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will opt for whoever is much faster, whoever can connect to their platform with less concerns and problems," he said, including 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 main bank and certified 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, increasing mobile phone usage and falling data expenses, Nigeria has long been seen as an excellent chance for online businesses - once customers feel comfortable with electronic payments.

Online gambling companies state that is taking place, though reaching the tens of without access to banking services stays a difficulty for pure online sellers.

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

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

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

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy whipped 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 startup Flutterwave, both founded in 2016, are offering competition for Nigeria's Interswitch which was set up in 2002 and was the main platform utilized by businesses operating in Nigeria.

"We included Paystack as one of our payment options without any excitement, without revealing to our consumers, and within a month it shot up to the top most secondhand payment alternative on the website," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's second biggest wagering firm, now had 2 million routine clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option since it was included late 2017.

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

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 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 as of 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 said a community of designers had emerged around Paystack, creating software application to integrate the platform into sites. "We have seen a growth in that neighborhood and they have carried us along," stated Quartey.

Paystack said it allows payments for a variety of sports betting firms however likewise a large range of companies, from energy 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 venture capitalists 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 accompanied the arrival of foreign financiers wanting to take advantage of 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 the service is more developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last two years while Italy's Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi stated its sales were divided between shops and online however the ease of electronic payments, cost of running shops and ability for clients to avoid the stigma of gambling in public indicated online deals would grow.

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

He stated the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering shops frequently act as social hubs where customers can view soccer complimentary of charge while positioning bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He said he began sports betting three months earlier and bets up to 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)