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 firms that are starting to make online organizations more viable.

For years, mobile payments stopped working to remove 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 fraud and sluggish internet speeds have actually held Nigerian online customers back but sports betting firms says the new, quick digital payment systems underpinning their websites are altering attitudes towards online transactions.

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

"The operators will go with whoever is quicker, whoever can connect to their platform with less concerns 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 actually been matched by an increase in web payments, according to data 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 jumped 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 cellphone usage and falling data costs, Nigeria has actually long been seen as an excellent opportunity for online services - once consumers feel comfy with electronic payments.

Online gambling companies say that is occurring, though reaching the tens of countless Nigerians without access to banking services remains a challenge for pure online retailers.

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

"There is a progressive shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The development in the variety of fintechs, and the federal government as an enabler, has actually helped the company to thrive. These technological shifts encouraged Betway to start running in Nigeria," he stated.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze whipped up by Nigeria's participation worldwide Cup state they are discovering the payment systems created by local start-ups such as Paystack are showing popular online.

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

"We included Paystack as one of our payment choices without any fanfare, without revealing to our consumers, and within a month it shot up to the top most used payment alternative on the site," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second greatest sports betting firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative 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 programme.

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, stated the number of month-to-month deals it processed increased 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," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it makes it possible for payments for a variety of sports betting companies but likewise a wide variety of services, from energy services to carry business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as investor 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 financiers wishing to use sports betting wagering.

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 the service is more established.

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

NairaBET's Alabi stated its sales were split in between shops and online but the ease of electronic payments, expense of running shops and capability for clients to avoid the preconception of gambling in public implied online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least since numerous customers still remain unwilling to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering shops often function as social centers where consumers can see soccer complimentary of charge while positioning bets.

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

Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a TV screen inside. He said he started sports betting 3 months ago and bets as much as 1,000 naira a day.

"Since I have been playing I have actually 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)