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 innovation companies that are starting to make online businesses more practical.

For 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 promoted a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have held Nigerian online customers back however sports betting companies says the brand-new, fast digital payment systems underpinning their sites are changing attitudes towards online transactions.

"We have actually seen significant development in the number of payment options that are readily available. All that is absolutely altering the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's industrial capital.

"The operators will choose whoever is much faster, whoever can link to their platform with less concerns and glitches," he said, including that taxes from sports betting in Lagos State rose 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 certified 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 first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, increasing mobile phone use and falling information expenses, Nigeria has long been seen as a great chance for online organizations - once consumers feel comfortable with electronic payments.

Online gambling firms state that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays a difficulty for pure online sellers.

British online wagering company Betway opened its very first African service 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 development in the number of fintechs, and the government as an enabler, has assisted the business to prosper. These technological shifts encouraged Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

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

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

"We added Paystack as one of our payment alternatives with no fanfare, without announcing to our clients, and within a month it soared to the primary most used payment alternative on the website," said Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's second biggest wagering firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was included in late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase financing 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 mad Ikeja district of Lagos, said the variety 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 month," stated Emmanuel Quartey, Paystack's head of development.

He said a community of designers had actually emerged around Paystack, creating software to incorporate the platform into sites. "We have seen a growth in that community and they have brought us along," stated Quartey.

Paystack said it makes it possible for payments for a number of sports betting companies but likewise a wide variety of businesses, from utility services to transport business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have accompanied the arrival of foreign investors 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 the business is more developed.

Russia's 1XBet and Slovakia's DOXXbet have 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 launched in 2015.

NairaBET's Alabi said its sales were divided between stores and online however the ease of electronic payments, expense of running shops and ability for consumers to avoid the preconception of gambling in public suggested online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least because numerous consumers still stay unwilling to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering stores frequently act as social hubs where clients can watch soccer free of charge while positioning bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He stated he started gambling three months earlier and bets up to 1,000 naira a day.

"Since I have been playing I have actually not won anything but I believe that a person day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)