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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are starting to make online services more practical.
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For several years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa money transfers have actually fostered a culture of cashless payments.

Fear of electronic fraud and sluggish internet speeds have actually held Nigerian online customers back however wagering companies states the new, fast digital payment systems underpinning their sites are altering mindsets towards online transactions.

“We have actually seen substantial development in the variety of payment solutions that are offered. All that is certainly changing the gaming space,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s industrial capital.

“The operators will opt for whoever is quicker, whoever can link to their platform with less issues 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 information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve 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 almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising smart phone usage and falling data costs, Nigeria has actually long been viewed as a fantastic chance for online organizations - once consumers feel comfortable with electronic payments.

Online gaming firms state that is taking place, though reaching the tens of without access to banking services stays an obstacle for pure online sellers.

British online wagering company Betway opened its very first African organization 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 said.

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

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria’s involvement worldwide Cup state they are finding the payment systems produced by regional start-ups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are supplying competition for Nigeria’s Interswitch which was set up in 2002 and was the primary platform utilized by services operating in Nigeria.

“We added Paystack as one of our payment alternatives without any fanfare, without announcing to our customers, and within a month it soared to the primary most used payment choice on the site,” said Akin Alabi, founder of NairabBET.

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

Paystack was set up by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received 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 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 each and every single month,” said Emmanuel Quartey, Paystack’s head of development.

He said an ecosystem of designers had actually emerged around Paystack, developing software application to incorporate the platform into websites. “We have actually seen a development in that community and they have brought us along,” stated Quartey.

Paystack said it enables payments for a variety of wagering firms but likewise a wide variety of services, from energy services to carry 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 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 accompanied the arrival of foreign investors intending to tap into sports betting wagering.

Industry specialists state the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the 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 pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET’s Alabi said its sales were divided in between stores and online however the ease of electronic payments, cost of running shops and capability for customers to prevent the stigma of gaming in public implied online transactions would grow.

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

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

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria’s last warm up video 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 stated he started gambling three months earlier and bets as much as 1,000 naira a day.

“Since I have been playing I have 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