By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic fraud and sluggish web speeds have actually held Nigerian online consumers back however sports betting firms states the new, fast digital payment systems underpinning their websites are altering attitudes towards online transactions.

"We have actually seen considerable growth in the number of payment solutions that are readily available. All that is definitely altering the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is faster, whoever can link to their platform with less issues and problems," 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 a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and certified 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 first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, increasing cellphone usage and falling information costs, Nigeria has actually long been viewed as a terrific opportunity for online businesses - once customers feel comfy with electronic payments.

Online gambling companies say that is happening, though reaching the 10s of countless Nigerians without access to banking services remains a challenge for pure online retailers.

British online wagering 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 said.

"The development in the number of fintechs, and the federal government as an enabler, has helped the business to prosper. These technological shifts encouraged Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy worked up by Nigeria's involvement in the World Cup state they are discovering the payment systems developed by local start-ups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by organizations operating in Nigeria.

"We included Paystack as one of our payment choices without any excitement, without announcing to our clients, and within a month it soared to the primary most used payment option on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation'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 alternative because it was included in late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase funding 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, said the variety of month-to-month 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 an ecosystem of designers had emerged around Paystack, producing software application to incorporate the platform into websites. "We have actually seen a development in that neighborhood and they have actually carried us along," stated Quartey.

Paystack said it enables payments for a number of sports betting companies however also a wide variety of businesses, from utility services to transport business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise 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 in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have actually corresponded with 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 business is more developed.

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last 2 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 said its sales were divided in between shops and online but the ease of electronic payments, cost of running stores and ability for consumers to prevent the preconception 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 necessary to have a store network, not least since many customers still remain hesitant to invest online.

He stated the company, with about 60 percent of Nigeria's sports sports betting market, had a substantial network. Nigerian sports betting shops often act as social centers where consumers can watch soccer totally free of charge while positioning bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a TV screen inside. He said he began gambling three months ago and bets as much as 1,000 naira a day.

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