By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic scams and sluggish web speeds have held Nigerian online consumers back however wagering firms says the new, fast digital payment systems underpinning their websites are altering mindsets towards online deals.

"We have actually seen considerable growth in the variety of payment options that are offered. All that is definitely altering the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is much faster, whoever can connect to their platform with less problems and glitches," he stated, adding 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 certified 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone use and falling data costs, Nigeria has actually long been viewed as an excellent opportunity for online services - 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 remains an obstacle for pure online sellers.

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

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

"The growth in the variety of fintechs, and the government as an enabler, has helped business to grow. These technological shifts motivated Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

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

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

"We added Paystack as one of our payment choices without any fanfare, without revealing to our clients, and within a month it shot up to the number one most used payment choice on the website," said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second biggest sports betting company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice 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 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, said the variety of monthly deals it processed rose 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 single month," said Emmanuel Quartey, Paystack's head of growth.

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

Paystack stated it allows payments for a number of sports betting firms however also a vast array of services, from energy services to transport companies to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program in addition to 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 actually coincided with the arrival of foreign financiers intending to tap into sports betting wagering.

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

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split in between shops and online but the ease of electronic payments, expense of running shops and capability for customers to prevent the preconception of gambling in public indicated online transactions would grow.

But regardless 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 because numerous customers still stay hesitant to spend online.

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

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans collected to watch Nigeria's final warm 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 said he started gambling three months ago and bets up to 1,000 naira a day.

"Since I have actually been playing I have actually not won anything however I think that one day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)