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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 firms that are starting to make online companies more feasible.

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

Fear of electronic fraud and sluggish internet speeds have held Nigerian online consumers back however wagering companies states the brand-new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.

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

"The operators will go with whoever is quicker, whoever can link to their platform with less issues and glitches," he said, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has actually 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 a total 132 billion naira ($420 million). Transactions leapt 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, increasing mobile phone usage and falling data expenses, Nigeria has actually long been viewed as a great chance for online services - once consumers feel comfy with electronic payments.

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

British online wagering company Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 growth in the number of fintechs, and the federal government as an enabler, has helped the service to prosper. These technological shifts encouraged Betway to begin operating in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies the soccer craze worked up by Nigeria's participation worldwide Cup say they are discovering the payment systems produced by local startups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the main platform used by businesses operating in Nigeria.

"We added Paystack as one of our payment choices without any excitement, without revealing to our clients, and within a month it shot up to the number one most secondhand payment alternative on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's 2nd greatest sports betting company, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment alternative since 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 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 monthly deals it processed rose 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 development.

He said an ecosystem of designers had actually emerged around Paystack, producing software to incorporate the platform into sites. "We have seen a development in that neighborhood and they have actually brought us along," said Quartey.

Paystack stated it makes it possible for payments for a variety of wagering companies but likewise a broad variety of businesses, from utility services to transfer business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise 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 actually corresponded with the arrival of foreign investors wishing to take advantage of sports betting.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi said its sales were divided between shops and online however the ease of electronic payments, cost of running stores and capability for clients to prevent the preconception of gambling in public indicated online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was important to have a store network, not least since many consumers still remain unwilling to invest online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian sports betting stores typically function as social hubs where customers can watch soccer free of charge while putting bets.

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

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He said he started sports betting three months ago and bets approximately 1,000 naira a day.

"Since I have been playing I have actually not won anything but I believe that one day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)