By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation firms that are beginning to make online businesses more feasible.

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

Fear of electronic scams and slow internet speeds have actually held Nigerian online consumers back however sports betting companies states the brand-new, fast digital payment systems underpinning their websites are changing attitudes towards online transactions.

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

"The operators will choose whoever is quicker, whoever can link to their platform with less concerns and glitches," he said, including that taxes from sports betting wagering 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 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, increasing smart phone use and falling data costs, Nigeria has long been seen as a terrific opportunity for online companies - once customers feel comfy with electronic payments.

Online gambling firms state that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online merchants.

British online wagering firm Betway opened its 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 variety of fintechs, and the federal government as an enabler, has assisted business to thrive. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's participation on the planet Cup say they are discovering the payment systems created by regional start-ups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by services 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 soared to the top most secondhand payment choice on the website," said Akin Alabi, creator of NairabBET.

He said NairaBET, the country's 2nd most significant sports betting firm, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was included late 2017.

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

In December 2016, it raised $1.3 million from investors including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the number of monthly transactions 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 every month," stated Emmanuel Quartey, Paystack's head of development.

He stated an environment 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," said Quartey.

Paystack stated it makes it possible for payments for a variety of sports betting companies but likewise a large range of companies, from utility services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to venture capitalists 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 actually accompanied the arrival of foreign investors intending to use sports betting wagering.

Industry professionals say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where business 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 was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

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

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a store network, not least because lots of clients 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 typically act as social centers where consumers can watch soccer free of charge while placing bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's last heat 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 said he began gambling three months back and bets up to 1,000 naira a day.

"Since I have 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; modifying by David Clarke)