bet9ja.com
By Alexis Akwagyiram and Didi Akinyelure
bet9ja.com
LAGOS, June 25 (Reuters) - Online sports betting wagering is flourishing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown innovation firms that are beginning to make online companies more viable.
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For many 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 actually fostered a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have held Nigerian online consumers back but sports betting companies says the brand-new, fast digital payment systems underpinning their sites are changing attitudes towards online transactions.

“We have actually seen considerable growth in the variety of payment services that are readily available. All that is absolutely altering the gaming space,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s industrial capital.

“The operators will choose whoever is quicker, whoever can connect to their platform with less issues and problems,” he stated, including 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 an increase 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 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 use and falling data expenses, Nigeria has actually long been seen as a terrific opportunity for online businesses - once customers feel comfy with electronic payments.

Online gaming firms state that is taking place, though reaching the 10s of millions of Nigerians without access to banking services stays an obstacle for pure online retailers.

British online sports betting company Betway opened its first African business 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 industry is going,” Betway’s Nigeria manager Lere Awokoya said.

“The development in the number of fintechs, and the federal government as an enabler, has actually helped business to flourish. These technological shifts motivated Betway to start running in Nigeria,” he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria’s involvement worldwide Cup say they are finding the payment systems developed by regional startups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are offering competition for Nigeria’s Interswitch which was set up in 2002 and was the main platform used by companies operating in Nigeria.

“We included Paystack as one of our payment options without any excitement, without revealing to our customers, and within a month it shot up to the top most used payment choice on the site,” stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country’s 2nd greatest wagering firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option given that it was included late 2017.

Paystack was established 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 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 month-to-month deals 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 ecosystem of designers had actually emerged around Paystack, developing software to integrate the platform into websites. “We have actually seen a development in that neighborhood and they have carried us along,” said Quartey.

Paystack stated it for a number of wagering companies however also a vast array of businesses, from utility services to transport companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur 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 in 2015.

FOREIGN INVESTMENT

Shifts in Nigeria’s payment culture have actually coincided with the arrival of foreign investors intending to use sports betting.

Industry experts state the sector generates about $1 billion a year and is most 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 set up 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 firm released in 2015.

NairaBET’s Alabi stated its sales were split between stores and online however the ease of electronic payments, cost of running shops and capability for clients to prevent the preconception of sports betting in public suggested online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least because many consumers still remain hesitant to spend online.

He stated the business, with about 60 percent of Nigeria’s sports betting wagering market, had an extensive network. Nigerian sports betting shops frequently function as social hubs where consumers can see soccer totally free of charge while putting bets.

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

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

“Since I have actually been playing I have not won anything but I think that a person day I will win,” stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos