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By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation firms that are beginning to make online businesses more viable.
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For many years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom’s M-Pesa cash transfers have actually cultivated a culture of cashless payments.

Fear of electronic scams and sluggish internet speeds have held Nigerian online customers back but wagering companies states the new, quick digital payment systems underpinning their sites are altering mindsets towards online deals.

“We have actually seen substantial development in the variety of payment services that are available. All that is absolutely changing the video gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s industrial capital.

“The operators will go with whoever is faster, whoever can connect to their platform with less concerns and problems,” he stated, including that taxes from sports betting in Lagos State rose 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 reserve bank and licensed 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 first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, rising cellphone use and falling information expenses, Nigeria has long been viewed as a fantastic opportunity for online companies - once consumers feel comfy with electronic payments.

Online gambling firms state that is happening, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online sellers.

British online sports betting company Betway opened its very first African organization in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.
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“There is a gradual shift to online now, that is where the industry is going,” Betway’s Nigeria manager Lere Awokoya stated.

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

FINTECH COMPETITION

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

and another regional startup Flutterwave, both founded in 2016, are supplying competition for Nigeria’s Interswitch which was established in 2002 and was the primary platform utilized by organizations running in Nigeria.

“We included Paystack as one of our payment options without any excitement, without revealing to our customers, and within a month it soared to the number one most secondhand payment option on the website,” said Akin Alabi, founder of NairabBET.

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

Paystack was established by 2 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 mad Ikeja district of Lagos, stated the variety 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 single month,” said Emmanuel Quartey, Paystack’s head of growth.

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

Paystack said it makes it possible for payments for a variety of sports betting firms but also a vast array of services, from utility services to transfer companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also 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 accompanied the arrival of foreign financiers intending to use sports betting.

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

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 trend, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

NairaBET’s Alabi stated its sales were split between shops and online but the ease of electronic payments, expense of running shops and capability for consumers to avoid the preconception of sports betting in public meant 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 due to the fact that numerous clients still remain unwilling to invest online.

He stated the company, with about 60 percent of Nigeria’s sports betting wagering market, had a comprehensive network. Nigerian wagering shops typically act as social centers where customers can enjoy soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria’s last heat up game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a television screen inside. He stated he began gambling 3 months earlier and bets approximately 1,000 naira a day.

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