By Alexis Akwagyiram and Didi Akinyelure

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

For years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have actually cultivated a culture of cashless payments.

Fear of electronic scams and slow internet speeds have actually held Nigerian online customers back but sports betting firms states the new, quick digital payment systems underpinning their sites are changing attitudes towards online transactions.

"We have actually seen significant growth in the number of payment solutions that are offered. All that is certainly changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is faster, whoever can link 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 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 certified 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone usage and falling information costs, Nigeria has actually long been viewed as a terrific opportunity for online companies - once customers feel comfy with electronic payments.

Online gaming companies state that is taking place, though reaching the tens of countless Nigerians without access to banking services stays an obstacle for pure online retailers.

British online sports betting company Betway opened its first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 grow. These technological shifts motivated Betway to begin operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's participation worldwide Cup state they are discovering the payment systems developed by regional startups such as Paystack are proving popular online.

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

"We added Paystack as one of our payment options without any fanfare, without revealing to our customers, and within a month it shot up to the top most used payment alternative on the website," said Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's second biggest 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 because it was included late 2017.

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley's Y-Combinator programme.

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 variety of month-to-month transactions 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 growth.

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

Paystack stated it enables payments for a variety of wagering companies however likewise a wide variety of companies, from utility services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program as well as 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 use sports betting.

Industry specialists say the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the company is more established.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET's Alabi said its sales were split between stores and online but the ease of electronic payments, expense of running stores and capability for consumers to avoid the preconception of sports betting 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 very important to have a store network, not least due to the fact that many 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 often serve as social centers where customers can view soccer totally free of charge while positioning bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans collected to see Nigeria's final heat up video game before the World Cup.

Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a television screen inside. He stated he began gambling three months earlier and bets approximately 1,000 naira a day.

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