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 established by homegrown technology firms that are beginning to make online businesses more feasible.

For many years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have fostered a culture of cashless payments.

Fear of electronic scams and slow internet speeds have held Nigerian online consumers back but wagering firms states the new, fast digital payment systems underpinning their websites are changing attitudes towards online deals.

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

"The operators will choose whoever is much faster, whoever can connect to their platform with less issues and problems," he stated, adding that taxes from sports betting wagering in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has been matched by a rise in web payments, according to data 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising mobile phone use and falling data expenses, Nigeria has actually long been viewed as a great chance for online businesses - once consumers feel comfortable with electronic payments.

Online gaming firms say that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online retailers.

British online sports betting company Betway opened its very 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 said.

"The development in the number of fintechs, and the federal government as an enabler, has helped 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 craze whipped up by Nigeria's involvement worldwide Cup state they are finding the payment systems developed by regional startups such as Paystack are proving popular online.

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

"We included Paystack as one of our payment alternatives without any excitement, without announcing to our consumers, and within a month it soared to the primary most secondhand payment alternative on the site," stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country's second biggest sports betting firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was included late 2017.

Paystack was established by 2 Nigerian computer science 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 investors 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 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," stated Emmanuel Quartey, Paystack's head of development.

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

Paystack stated it allows payments for a number of wagering companies however likewise a large range of companies, from energy services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with 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 accompanied the arrival of foreign financiers wishing to use sports betting wagering.

Industry professionals say the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the organization 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 split between stores and online but the ease of electronic payments, cost of running shops and ability for clients to prevent the preconception of gaming in public meant online transactions 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 due to the fact that numerous customers still stay unwilling to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting stores typically act as social centers where clients can watch soccer totally free of charge while putting bets.

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

Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a television screen inside. He stated he started sports betting three months back and bets as much as 1,000 naira a day.

"Since I have been playing I have actually not won anything however 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)