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 companies that are beginning to make online organizations more viable.

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

Fear of electronic scams and sluggish internet speeds have held Nigerian online consumers back but wagering firms states the brand-new, fast digital payment systems underpinning their sites are altering mindsets towards online transactions.

"We have actually seen substantial growth in the variety of payment services that are offered. All that is certainly changing the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, 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 glitches," he said, adding 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 an overall 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 mobile phone usage and falling information expenses, Nigeria has actually long been seen as an excellent chance for online businesses - once customers feel comfortable with electronic payments.

Online gambling companies 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 wagering firm Betway opened its first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

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

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

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy worked up by Nigeria's involvement in the World Cup say they are discovering the payment systems created by regional startups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competition for Nigeria's Interswitch which was established in 2002 and was the main platform used by organizations operating in Nigeria.

"We added Paystack as one of our payment alternatives without any fanfare, without announcing to our customers, and within a month it shot up to the primary most secondhand payment alternative on the site," stated Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's 2nd greatest wagering firm, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice 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 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 frenetic Ikeja district of Lagos, said 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 each and 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 websites. "We have seen a growth because neighborhood and they have actually brought us along," said Quartey.

Paystack stated it enables payments for a variety of sports betting companies but likewise a vast array of services, from utility services to carry companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to endeavor 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 accompanied the arrival of foreign financiers wishing to tap into sports betting.

Industry specialists state the sector produces 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 half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split between stores and online but the ease of electronic payments, cost of running stores and ability for customers to avoid the preconception of sports betting in public meant online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least because many customers still stay hesitant to spend online.

He said the business, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian wagering stores often function as social centers where consumers can watch soccer complimentary of charge while placing 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 game before the World Cup.

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

"Since I have actually been playing I have actually 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; modifying by David Clarke)