By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology firms that are starting to make online services 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 money transfers have cultivated a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have held Nigerian online customers back but sports betting companies states the brand-new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.

"We have actually seen significant development in the variety of payment solutions that are readily available. All that is definitely changing the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

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

That development 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 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising cellphone usage and falling data costs, Nigeria has actually long been seen as an excellent opportunity for online organizations - once consumers feel comfy with electronic payments.

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

British online wagering company Betway opened its first African service 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 manager Lere Awokoya stated.

"The growth in the number of fintechs, and the government as an enabler, has helped the organization to thrive. 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 participation worldwide Cup say they are finding the payment systems created by regional startups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are offering competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by services operating in Nigeria.

"We added Paystack as one of our payment options with no fanfare, 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 stated NairaBET, the country's second biggest wagering firm, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given that it was added in late 2017.

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

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 number of regular monthly deals it processed increased 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 every single month," said Emmanuel Quartey, Paystack's head of development.

He stated a community of developers had actually emerged around Paystack, developing software to integrate the platform into sites. "We have actually seen a growth because community and they have carried us along," said Quartey.

Paystack said it allows payments for a number of wagering companies however also a vast array of services, from energy services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 accompanied the arrival of foreign financiers wishing to use sports betting wagering.

Industry professionals 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 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 half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split in between stores and online but the ease of electronic payments, expense of running shops and ability for clients to avoid the preconception 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 since many customers still remain reluctant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops often serve as social hubs where customers can enjoy soccer complimentary of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to view Nigeria's last warm 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 3 months ago and bets up to 1,000 naira a day.

"Since I have actually been playing I have not won anything however I think that one day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)