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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation firms that are starting to make online organizations more viable.
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For several 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 promoted a culture of cashless payments.

Fear of electronic fraud and slow web speeds have actually held Nigerian online customers back however sports betting companies states the new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

“We have seen considerable growth in the number of payment solutions that are available. All that is definitely changing the video gaming area,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s commercial capital.

“The operators will choose whoever is faster, whoever can connect to their platform with less problems and problems,” he said, 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 a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of nearly 190 million, rising cellphone use and falling information costs, Nigeria has actually long been viewed as a terrific opportunity for online services - once customers feel comfy with electronic payments.

Online gambling companies state that is taking place, though the tens of countless Nigerians without access to banking services stays an obstacle for pure online merchants.

British online sports betting 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 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 federal government as an enabler, has helped business to prosper. These technological shifts motivated Betway to start running in Nigeria,” he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze worked up by Nigeria’s participation worldwide Cup state they are discovering the payment systems produced by regional start-ups such as Paystack are showing popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are supplying competition for Nigeria’s Interswitch which was established in 2002 and was the main platform utilized by companies running in Nigeria.

“We added Paystack as one of our payment choices without any excitement, without revealing to our consumers, and within a month it soared to the top most secondhand payment choice on the site,” said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation’s 2nd greatest wagering company, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment option since it was included late 2017.

Paystack was set up by two Nigerian computer 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 investors consisting of China’s Tencent and Comcast Ventures in the United States.
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Paystack, based in the mad Ikeja district of Lagos, said the number of regular monthly transactions it processed increased 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 developers had emerged around Paystack, developing software to integrate the platform into sites. “We have seen a growth in that 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 broad range of services, from utility services to carry companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program in addition to endeavor capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.

FOREIGN INVESTMENT
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Shifts in Nigeria’s payment culture have accompanied the arrival of foreign financiers wanting to take advantage of sports betting wagering.

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 set up 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 company released in 2015.

NairaBET’s Alabi said its sales were divided in between shops and online however the ease of electronic payments, cost of running shops and ability for customers to prevent the stigma of sports betting in public indicated online deals would grow.

But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was essential to have a store network, not least because numerous clients still remain hesitant to spend online.

He stated the business, with about 60 percent of Nigeria’s sports betting market, had a substantial network. Nigerian wagering stores typically serve as social hubs where customers can enjoy soccer totally free of charge while positioning bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans collected to see Nigeria’s final heat up video game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He stated he started sports betting three months back and bets approximately 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,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos