By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are beginning to make online companies more viable.

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

Fear of electronic scams and slow internet speeds have held Nigerian online consumers back however wagering companies states the new, fast digital payment systems underpinning their websites are altering mindsets towards online transactions.

"We have actually seen substantial growth in the number of payment services that are available. All that is absolutely altering the gaming area," stated 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 link to their platform with less problems and glitches," he stated, adding that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth has been matched by an increase 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 an overall 132 billion naira ($420 million). Transactions leapt 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, increasing mobile phone usage and falling data costs, Nigeria has actually long been seen as a fantastic opportunity for online companies - once customers feel comfy with electronic payments.

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

British online wagering company Betway opened its first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.

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

"The development in the variety of fintechs, and the government as an enabler, has actually assisted the business to thrive. These technological shifts encouraged Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze whipped up by Nigeria's participation worldwide Cup state they are finding the payment systems produced by local startups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by companies running in Nigeria.

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

He said NairaBET, the nation's second most significant 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 option given that it was added in late 2017.

Paystack was set up by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early phase funding 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 frenetic Ikeja district of Lagos, said the number 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," said Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of developers had actually emerged around Paystack, creating software application to incorporate the platform into websites. "We have seen a growth because neighborhood and they have actually brought us along," said Quartey.

Paystack said it allows payments for a number of sports betting firms but also a wide variety of organizations, from energy services to transfer business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with 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 financiers hoping to take advantage of sports betting.

Industry experts say the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where business is more developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a half 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 but the ease of electronic payments, cost of running stores and capability for customers to avoid the preconception of gambling in public implied online transactions would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least since lots of consumers still remain reluctant 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 often act as social centers where consumers can view soccer totally free of charge while placing 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 TV screen inside. He stated he began 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 a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)