By Alexis Akwagyiram and Didi Akinyelure

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

For several years, mobile payments failed 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 fraud and sluggish internet speeds have actually held Nigerian online customers back but sports betting firms says the brand-new, quick digital payment systems underpinning their sites are changing mindsets towards online deals.

"We have actually seen significant growth in the variety of payment solutions that are readily available. All that is absolutely changing the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.

"The operators will go with whoever is much faster, whoever can link to their platform with less problems and problems," he said, adding that taxes from sports betting wagering 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 information 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 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 cellphone usage and falling data costs, Nigeria has long been seen as a great opportunity for online organizations - once consumers feel comfortable with electronic payments.

Online sports betting firms say that is happening, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online merchants.

British online wagering firm Betway opened its very first African business 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 growth in the number of fintechs, and the federal government as an enabler, has actually helped business to thrive. These technological shifts encouraged Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy worked up by Nigeria's participation in the World Cup say they are discovering the payment systems produced by local start-ups such as Paystack are proving popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by organizations operating in Nigeria.

"We added Paystack as one of our payment choices with no fanfare, without revealing to our customers, and within a month it soared to the top most used payment alternative on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the country's second greatest sports betting company, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was included in late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley's Y-Combinator program.

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 number of regular 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 every month," stated Emmanuel Quartey, Paystack's head of growth.

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

Paystack stated it enables payments for a number of wagering companies but also a large range of services, from utility services to transport companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as endeavor 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 intending to tap into sports betting.

Industry specialists 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 established.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi said its sales were divided between shops and online but the ease of electronic payments, expense of running stores and capability for consumers to avoid the preconception 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 necessary to have a shop network, not least due to the fact that numerous customers still remain reluctant to invest online.

He said the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering stores typically function as social centers where consumers can view soccer free of charge while positioning bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he began gambling three months back and bets up to 1,000 naira a day.

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