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 businesses more feasible.

For several years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually cultivated a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have held Nigerian online consumers back but sports betting firms states the new, quick digital payment systems underpinning their sites are changing mindsets towards online deals.

"We have seen considerable development in the variety of payment solutions that are readily available. All that is certainly changing the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will go with whoever is faster, whoever can connect to their platform with less concerns and problems," he said, 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 an increase in web payments, according to information 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 a total 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 smart phone usage and falling information costs, Nigeria has actually long been seen as a fantastic opportunity for online organizations - once consumers feel comfortable with electronic payments.

Online sports betting firms say that is occurring, though reaching the tens of countless Nigerians without access to banking services remains a difficulty for pure online sellers.

British online sports betting company Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

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

"The development in the number of fintechs, and the federal government as an enabler, has helped the service to flourish. These technological shifts encouraged Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy whipped up by Nigeria's participation on the planet Cup state they are finding the payment systems produced by local start-ups 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 established in 2002 and was the primary platform used by organizations operating in Nigeria.

"We included Paystack as one of our payment alternatives with no excitement, without announcing to our clients, and within a month it shot up to the primary most secondhand payment alternative on the site," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second biggest sports betting firm, now had 2 million routine 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 set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley's Y-Combinator program.

In December 2016, it raised $1.3 million from financiers including 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 deals 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 each and every single month," stated Emmanuel Quartey, Paystack's head of growth.

He stated an ecosystem of designers had actually emerged around Paystack, producing software application to integrate the platform into websites. "We have seen a growth in that community and they have carried us along," stated Quartey.

Paystack stated it makes it possible for payments for a variety of wagering firms however also a wide variety of organizations, from utility services to transport companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to 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 accompanied the arrival of foreign investors wanting to take advantage of sports betting.

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

Russia's 1XBet and Slovakia's DOXXbet have both set up 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 launched in 2015.

NairaBET's Alabi said its sales were split between stores and online however the ease of electronic payments, expense of running stores and capability for clients to prevent the stigma of gambling in public meant online transactions would grow.

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

He said the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering shops often act as social centers where consumers can see soccer totally free of charge while placing bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a TV screen inside. He stated he started gambling three 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 one day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)