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By Alexis Akwagyiram and Didi Akinyelure

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

For 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 scams and slow internet speeds have held Nigerian online customers back however wagering firms says the brand-new, quick digital payment systems underpinning their websites are altering attitudes towards online transactions.

“We have seen considerable development in the number of payment solutions that are offered. All that is definitely 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 much faster, whoever can connect to their platform with less issues 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 development 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 central bank and licensed banks.

In 2016, there were 14 million web payments worth a total 132 billion naira ($420 million). Transactions jumped to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were nearly 10 million worth 61 billion.

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

Online sports betting firms say that is occurring, though reaching the tens of millions of Nigerians without access to banking services stays an obstacle for pure online merchants.

British online wagering firm Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.

“There is a progressive 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 government as an enabler, has actually assisted business to grow. These technological shifts motivated Betway to begin operating in Nigeria,” he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy worked up by Nigeria’s participation on the planet Cup say they are finding the payment systems developed by regional startups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are providing competition 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 with no excitement, without announcing to our consumers, and within a month it shot up to the number one most secondhand payment alternative on the website,” stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country’s 2nd biggest wagering firm, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given that it was included late 2017.

Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley’s Y-Combinator programme.

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, stated the variety of regular monthly 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 single month,” said Emmanuel Quartey, Paystack’s head of development.

He said an ecosystem of developers had emerged around Paystack, creating software to integrate the platform into sites. “We have actually seen a growth in that community and they have actually carried us along,” said Quartey.

Paystack stated it enables payments for a variety of sports betting companies however likewise a vast array of companies, from energy services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
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FOREIGN INVESTMENT

Shifts in Nigeria’s payment culture have actually coincided with the arrival of foreign investors wanting to take advantage of sports betting wagering.

Industry experts say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more established.

Russia’s 1XBet and Slovakia’s DOXXbet have both established in Nigeria in the last two years while Italy’s Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian in 2015.

NairaBET’s Alabi stated its sales were divided in between shops and online but the ease of electronic payments, expense of running shops and ability for clients to prevent the preconception of sports betting in public indicated online deals would grow.

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

He stated the company, with about 60 percent of Nigeria’s sports betting wagering market, had a comprehensive network. Nigerian wagering stores often function as social centers where consumers can view soccer complimentary of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans gathered to see Nigeria’s last heat up game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a TV screen inside. He said he started sports betting three months back and bets up to 1,000 naira a day.

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