By Alexis Akwagyiram and Didi Akinyelure

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

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

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

"We have actually seen substantial growth in the number of payment solutions that are readily available. All that is definitely changing the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

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

That growth has been matched by a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main bank and certified banks.

In 2016, there were 14 million web payments worth an overall 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, increasing mobile phone usage and falling data costs, Nigeria has actually long been seen as an excellent opportunity for online businesses - once customers feel comfortable with electronic payments.

Online gaming firms say that is happening, though reaching the tens of millions of Nigerians without access to banking services stays an obstacle for pure online retailers.

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

"There is a steady 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 actually helped business to flourish. These technological shifts encouraged Betway to begin operating in Nigeria," he stated.

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 created by local start-ups such as Paystack are proving popular online.

Paystack and another local startup Flutterwave, both established in 2016, are providing competitors 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 options with no excitement, without revealing to our customers, and within a month it soared to the primary most secondhand payment option on the site," said Akin Alabi, founder of NairabBET.

He stated NairaBET, the nation's 2nd greatest sports betting firm, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option because it was included late 2017.

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase financing 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 frenetic Ikeja district of Lagos, stated the number of monthly transactions it processed rose 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 each and every single month," stated Emmanuel Quartey, Paystack's head of development.

He stated a community of designers had actually emerged around Paystack, producing software to incorporate the platform into sites. "We have seen a growth because community and they have actually carried us along," stated Quartey.

Paystack stated it allows payments for a number of wagering companies however likewise a large range of organizations, from utility services to transfer business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to venture capitalists 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 investors wishing to take advantage of sports betting.

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

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company 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 customers to prevent the stigma of gambling in public indicated online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a store network, not least due to the fact that lots of customers still remain reluctant to invest online.

He said the business, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting stores typically function as social centers where clients can enjoy soccer totally free of charge while putting bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He stated he started 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," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)