By Alexis Akwagyiram and Didi Akinyelure

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

For years, mobile payments stopped working to remove 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 scams and slow internet speeds have held Nigerian online consumers back however wagering firms says the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.

"We have actually seen significant growth in the variety of payment solutions that are offered. All that is absolutely altering the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

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

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

With a young population of nearly 190 million, rising cellphone use and falling data expenses, Nigeria has long been viewed as a fantastic opportunity for online organizations - once customers feel comfy with electronic payments.

Online sports betting companies state that is taking place, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle for pure online sellers.

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 market is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The growth in the variety of fintechs, and the government as an enabler, has assisted the service to grow. These technological shifts motivated Betway to start running in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze 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 proving popular online.

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

"We added Paystack as one of our payment options with no fanfare, without revealing to our clients, and within a month it shot up to the primary most pre-owned payment alternative on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's 2nd most significant wagering company, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included in late 2017.

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

In December 2016, it raised $1.3 million from investors including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the variety of monthly deals 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 every month," stated Emmanuel Quartey, Paystack's head of growth.

He stated a community of developers had actually emerged around Paystack, creating software application to incorporate the platform into websites. "We have seen a growth because neighborhood and they have carried us along," stated Quartey.

Paystack said it allows payments for a number of sports betting companies however likewise a vast array of businesses, from energy services to transfer companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to investor 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 accompanied the arrival of foreign financiers intending to take advantage of sports betting wagering.

Industry professionals say the sector creates about $1 billion a year and is 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 established in Nigeria in the last two years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi said its sales were split between stores and online however the ease of electronic payments, cost of running stores and capability for clients to avoid the preconception of gaming in public implied 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 shop network, not least since numerous clients still remain hesitant to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting shops typically function as social centers where customers can see soccer free of charge while putting bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He said he started 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 believe 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)