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 established by homegrown technology firms that are starting to make online companies more viable.

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

Fear of electronic fraud and sluggish web speeds have held Nigerian online consumers back however wagering firms says the brand-new, fast digital payment systems underpinning their sites are altering attitudes towards online transactions.

"We have seen substantial growth in the variety of payment solutions that are available. All that is definitely changing 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 link to their platform with less issues and glitches," he stated, including that taxes from sports betting 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 central 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 almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing mobile phone usage and falling data expenses, Nigeria has actually long been viewed as an excellent opportunity for online services - once customers feel comfortable with electronic payments.

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

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 steady shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya said.

"The development in the variety of fintechs, and the federal government as an enabler, has actually helped business to prosper. These technological shifts encouraged Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's participation worldwide Cup say they are discovering the payment systems developed by regional start-ups such as Paystack are showing popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are providing competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform used by businesses running in Nigeria.

"We added Paystack as one of our payment options without any excitement, without announcing to our consumers, and within a month it soared to the top most secondhand payment option on the site," stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country's 2nd biggest wagering firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was included in late 2017.

Paystack was set up by two Nigerian computer system science 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 mad Ikeja district of Lagos, said the variety of regular monthly transactions 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 each and every single month," stated Emmanuel Quartey, Paystack's head of development.

He said an environment of designers had actually emerged around Paystack, creating software to integrate the platform into websites. "We have actually seen a growth because community and they have carried us along," stated Quartey.

Paystack said it enables payments for a variety of wagering companies but also a wide variety of organizations, 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 in addition to investor 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 corresponded with the arrival of foreign financiers wishing to tap into sports betting wagering.

Industry experts say the sector creates 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 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.

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

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a shop network, not least since numerous consumers still remain unwilling to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian wagering stores typically serve as social hubs where customers can watch soccer free of charge while placing bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered 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 said he began gambling 3 months ago and bets approximately 1,000 naira a day.

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