By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria largely thanks to payment systems established by homegrown technology companies that are starting to make online businesses more viable.

For many years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.

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

"We have seen substantial development in the variety of payment solutions that are offered. All that is definitely altering the gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is quicker, whoever can link to their platform with less issues and problems," he stated, including 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 certified 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 nearly 10 million worth 61 billion.

With a young population of nearly 190 million, rising mobile phone use and falling data expenses, Nigeria has long been viewed as a terrific opportunity for online organizations - once customers feel comfy with electronic payments.

Online gambling companies state that is happening, though reaching the tens of millions of Nigerians without access to banking services remains an obstacle for pure online sellers.

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

"The development in the number of fintechs, and the federal government as an enabler, has assisted the business to grow. These technological shifts motivated Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

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

Paystack and another local start-up Flutterwave, both founded in 2016, are offering competitors for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by companies operating in Nigeria.

"We included Paystack as one of our payment choices without any excitement, without announcing to our clients, and within a month it soared to the top most pre-owned payment option on the website," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second 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 alternative given that it was included late 2017.

Paystack was established by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley's Y-Combinator programme.

In December 2016, it raised $1.3 million from investors including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, stated the variety of regular monthly transactions it processed increased 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 every single month," stated Emmanuel Quartey, Paystack's head of development.

He said a community of designers had emerged around Paystack, developing software to incorporate the platform into websites. "We have seen a growth because neighborhood and they have actually carried us along," said Quartey.

Paystack stated it enables payments for a variety of wagering firms however also a wide variety of organizations, from energy services to transfer business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as venture capitalists 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 investors wanting to use sports betting.

Industry professionals state 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 established.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last 2 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 stated its sales were split in between stores and online but the ease of electronic payments, expense of running shops and ability for clients to avoid the preconception of gaming 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 essential to have a store network, not least due to the fact that numerous clients still remain hesitant to invest online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian sports betting shops often act as social hubs where clients can view soccer totally free of charge while placing bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, lots of soccer fans gathered to view Nigeria's last heat up video game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a television screen inside. He stated he started sports betting 3 months back and bets up to 1,000 naira a day.

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