By Alexis Akwagyiram and Didi Akinyelure

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

For many years, mobile payments failed 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 scams and slow internet speeds have actually held Nigerian online customers back but wagering companies states the new, fast digital payment systems underpinning their sites are altering attitudes towards online deals.

"We have seen significant growth in the number of payment services that are offered. All that is definitely altering the video gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is quicker, whoever can link to their platform with less concerns and problems," he stated, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has been matched by a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve bank and licensed 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, increasing mobile phone use and falling data costs, Nigeria has long been seen as a great chance for online services - once customers feel comfortable with electronic payments.

Online sports betting companies state that is occurring, though reaching the 10s of countless Nigerians without access to banking services remains a challenge for pure online sellers.

British online wagering firm Betway opened its very first African service 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 industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The growth in the number of fintechs, and the government as an enabler, has actually assisted business to thrive. These technological shifts encouraged Betway to start running in Nigeria," he said.

FINTECH COMPETITION

sports betting companies capitalizing the soccer craze worked up by Nigeria's involvement worldwide Cup say they are finding the payment systems developed by local start-ups such as Paystack are showing popular online.

Paystack and another regional 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 organizations operating in Nigeria.

"We added Paystack as one of our payment alternatives with no excitement, without announcing to our consumers, and within a month it soared to the number one most secondhand payment option on the site," said Akin Alabi, founder of NairabBET.

He said NairaBET, the nation's second biggest wagering firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative because it was added in late 2017.

Paystack was established by 2 Nigerian computer technology 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 financiers consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the mad Ikeja district of Lagos, said the number of month-to-month 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 each and every single month," stated Emmanuel Quartey, Paystack's head of growth.

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

Paystack said it allows payments for a variety of wagering firms however also a large range of services, from utility services to carry 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 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 actually corresponded with the arrival of foreign investors wishing to take advantage of sports betting.

Industry specialists state the sector produces about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service 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 half stake in market leader Bet9ja when the Nigerian company released in 2015.

NairaBET's Alabi stated its sales were divided between stores and online however the ease of electronic payments, cost of running stores and capability for customers to avoid the preconception of gambling in public indicated online transactions would grow.

But in spite 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 due to the fact that many clients still remain reluctant to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had an extensive network. Nigerian sports betting shops often serve as social centers where consumers can view soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to enjoy Nigeria's last warm up game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was fixated on a TV screen inside. He said he began gambling three months back 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," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)