By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is booming in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation firms that are beginning to make online services more viable.
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For years, mobile payments stopped working to remove 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 fraud and slow web speeds have held Nigerian online consumers back however sports betting firms says the new, fast digital payment systems underpinning their websites are altering attitudes towards online deals.

“We have actually seen considerable development in the number of payment options that are offered. All that is absolutely changing the gaming area,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s business capital.

“The operators will choose whoever is much faster, whoever can link to their platform with less issues and glitches,” he said, 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 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 a total 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 almost 190 million, increasing cellphone use and falling data costs, Nigeria has actually long been seen as a fantastic chance for online services - once consumers feel comfortable with electronic payments.

Online sports betting companies say that is taking place, though reaching the 10s of millions of Nigerians without access to banking services remains an obstacle for pure online sellers.
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British online wagering firm Betway opened its very first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

“There is a gradual shift to online now, that is where the industry is going,” Betway’s Nigeria supervisor Lere Awokoya stated.

“The development in the variety of fintechs, and the government as an enabler, has helped the company to flourish. These technological shifts motivated Betway to start running in Nigeria,” he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze worked up by Nigeria’s involvement in the World Cup say they are discovering the payment systems developed by local start-ups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competition for Nigeria’s Interswitch which was set up in 2002 and was the main platform used by organizations running in Nigeria.

“We added Paystack as one of our payment alternatives with no fanfare, without revealing to our clients, and within a month it soared to the top most pre-owned payment choice on the site,” stated Akin Alabi, founder of NairabBET.

He said NairaBET, the country’s 2nd greatest wagering firm, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option considering that it was added in late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley’s Y-Combinator programme.

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, stated 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.
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“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 growth.

He said an environment of designers had emerged around Paystack, creating software to incorporate the platform into websites. “We have actually seen a development because neighborhood and they have brought us along,” said Quartey.

Paystack stated it makes it possible for payments for a variety of wagering firms however also a vast array of companies, from utility services to transfer companies to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also 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

Shifts in Nigeria’s payment culture have actually coincided with the arrival of foreign financiers wanting to tap into sports betting.

Industry specialists state 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 developed.

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 released in 2015.
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NairaBET’s Alabi said its sales were split between shops and online however the ease of electronic payments, expense of running shops and capability for clients to avoid the stigma of gaming in public meant online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least because many consumers still remain reluctant to spend online.

He stated the company, with about 60 percent of Nigeria’s sports betting wagering market, had an extensive network. Nigerian wagering shops frequently function as social centers where customers can enjoy soccer free of charge while placing bets.
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At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans collected to final warm up video game before the World Cup.

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a TV screen inside. He stated he started sports betting three months earlier and bets approximately 1,000 naira a day.

“Since I have actually been playing I have not won anything however I believe that a person day I will win,” stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos