By Alexis Akwagyiram and Didi Akinyelure

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

For many 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 promoted a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have actually held Nigerian online customers back however wagering firms says the new, fast digital payment systems underpinning their websites are altering mindsets towards online deals.

"We have actually seen significant development in the variety of payment services that are readily available. All that is absolutely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

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

That development 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 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 nearly 190 million, increasing cellphone use and falling data costs, Nigeria has actually long been viewed as an excellent chance for online organizations - once customers feel comfortable with electronic payments.

Online gambling firms say that is taking place, though reaching the tens of millions of Nigerians without access to banking services remains 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 released in Nigeria in January.

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

"The development in the number of fintechs, and the government as an enabler, has assisted business to thrive. These technological shifts encouraged Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's involvement worldwide Cup state they are finding the payment systems produced by regional startups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment alternatives without any excitement, without revealing to our customers, and within a month it shot up to the top most secondhand payment choice on the website," said Akin Alabi, creator of NairabBET.

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

Paystack was established 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 mad Ikeja district of Lagos, said the number of month-to-month transactions 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 said an environment of designers had actually emerged around Paystack, developing software application to incorporate the platform into sites. "We have actually seen a growth because neighborhood and they have brought us along," stated Quartey.

Paystack stated it makes it possible for payments for a number of sports betting firms but likewise a wide variety of companies, from utility services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as 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 actually corresponded with the arrival of foreign investors intending to tap into sports betting.

Industry professionals state the sector creates 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 actually both established in Nigeria in the last 2 years while Italy's Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm released 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 capability for clients to prevent the stigma of gaming in public indicated online transactions would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a shop network, not least due to the fact that lots of clients still stay reluctant to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian sports betting stores typically serve as social centers where clients can watch soccer complimentary of charge while placing bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he started gambling three months back and bets approximately 1,000 naira a day.

"Since I have actually been playing I have not won anything however I believe 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)