By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown technology companies that are beginning to make online companies more viable.

For several years, mobile payments stopped working to remove in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have actually cultivated a culture of cashless payments.

Fear of electronic scams and sluggish web speeds have held Nigerian online consumers back but sports betting firms states the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

"We have seen significant development in the variety of payment solutions that are readily available. All that is absolutely changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's commercial capital.

"The operators will opt for whoever is quicker, whoever can link to their platform with less concerns and glitches," he said, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That development 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 licensed banks.

In 2016, there were 14 million web payments worth an overall 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 use and falling information costs, Nigeria has actually long been seen as a great opportunity for online businesses - once consumers feel comfy with electronic payments.

Online gaming firms state that is occurring, though reaching the tens of millions of Nigerians without access to banking services stays a challenge for pure online retailers.

British online wagering company Betway opened its very first African service in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced 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 variety of fintechs, and the government as an enabler, has actually assisted business to thrive. These technological shifts motivated Betway to begin running in Nigeria," he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's involvement worldwide Cup state they are finding the payment systems produced by regional startups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both founded in 2016, are offering competitors for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by services running in Nigeria.

"We included Paystack as one of our payment options with no excitement, without announcing to our customers, and within a month it shot up to the number one most used payment choice on the site," stated Akin Alabi, creator 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 stayed the most popular payment option since it was included late 2017.

Paystack was set up by 2 Nigerian computer science 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 including 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 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 every single month," stated Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of designers had actually emerged around Paystack, creating software application to incorporate the platform into websites. "We have seen a growth in that neighborhood and they have actually carried us along," stated Quartey.

Paystack stated it allows payments for a variety of wagering companies however likewise a wide variety of businesses, from utility services to carry business to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner 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 intending to tap into sports betting.

Industry 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 developed.

Russia's 1XBet and Slovakia's DOXXbet have both set up in Nigeria in the last 2 years while Italy's Goldbet led the trend, taking a half stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi stated its sales were divided in between stores and online but the ease of electronic payments, cost of running shops and ability for consumers to avoid the stigma of sports betting in public suggested online deals would grow.

But in spite of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a shop network, not least because numerous customers still remain reluctant to invest online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian sports betting stores typically function as social centers where customers can see soccer complimentary of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to watch 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 television screen inside. He said he began gambling 3 months earlier and bets approximately 1,000 naira a day.

"Since I have been playing I have not won anything but 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)