By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology companies that are starting to make online services more practical.

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 fostered a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online consumers back however sports betting firms states the new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.

"We have seen significant growth in the number of payment options that are offered. All that is definitely changing the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is faster, whoever can link to their platform with less problems and glitches," he said, including that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth has been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed banks.

In 2016, there were 14 million web payments worth an overall 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, rising cellphone use and falling data costs, Nigeria has long been seen as a fantastic opportunity for online businesses - once consumers feel comfortable with electronic payments.

Online sports betting companies state that is occurring, though reaching the tens of millions of Nigerians without access to banking services stays a difficulty for pure online retailers.

British online sports betting firm Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

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

"The development in the number of fintechs, and the government as an enabler, has helped business to prosper. These technological shifts motivated Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's involvement worldwide 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 established in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the primary platform used by businesses operating in Nigeria.

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

He said NairaBET, the country's 2nd greatest wagering company, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that 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 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 since June 2018.

"In early 2016 we were processing about $3,000 a month. Today we process well over $11 million every month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it allows payments for a number of sports betting firms but likewise a wide variety of businesses, from utility services to carry business to insurance company 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 coincided with the arrival of foreign investors intending to tap into sports betting.

Industry specialists 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 established.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi stated its sales were split in between stores and online however the ease of electronic payments, cost of running shops and capability for consumers to avoid the stigma of gambling in public suggested online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was crucial to have a store network, not least since many consumers still remain unwilling to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting stores often act as social hubs where consumers can see soccer complimentary of charge while positioning bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He stated he started sports betting 3 months ago and bets approximately 1,000 naira a day.

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