By Alexis Akwagyiram and Didi Akinyelure

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

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

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

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

"The operators will go with whoever is quicker, whoever can connect to their platform with less problems 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 an increase in web payments, according to information 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 a total 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the very first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone usage and falling data costs, Nigeria has long been viewed as a great opportunity for online businesses - once consumers feel comfy with electronic payments.

Online gambling firms say that is happening, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online merchants.

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

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

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria's participation in the World Cup state they are discovering the payment systems created by regional start-ups such as Paystack are proving popular online.

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

"We included Paystack as one of our payment choices without any excitement, without revealing to our customers, and within a month it soared to the primary most pre-owned payment alternative on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second biggest wagering company, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was included late 2017.

Paystack was set up 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 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 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 an environment of designers had actually emerged around Paystack, producing software to integrate the platform into sites. "We have seen a growth because neighborhood and they have carried us along," stated Quartey.

Paystack stated it enables payments for a number of wagering companies however likewise a broad range of services, from utility services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as endeavor 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 actually accompanied the arrival of foreign financiers wanting to use sports betting wagering.

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

NairaBET's Alabi stated its sales were divided in between shops and online however the ease of electronic payments, cost of running shops and capability for customers to prevent the stigma of sports betting in public suggested online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was crucial to have a shop network, not least because numerous clients still remain unwilling to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had an . Nigerian sports betting stores typically act as social centers where consumers can see 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 enjoy Nigeria's last heat up game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he started sports betting 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 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)