By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are beginning to make online businesses more practical.

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

Fear of electronic fraud and slow internet speeds have actually held Nigerian online consumers back but sports betting firms states the new, fast digital payment systems underpinning their websites are changing mindsets towards online deals.

"We have actually seen substantial growth in the variety of payment options that are available. All that is certainly altering the video gaming space," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will go with whoever is faster, whoever can link to their platform with less problems and problems," he said, adding 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 jumped 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 information costs, Nigeria has actually long been seen as a great opportunity for online businesses - once consumers feel comfy with electronic payments.

Online sports betting companies say that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays a challenge for pure online retailers.

British online wagering firm Betway opened its very first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

"There is a steady shift to online now, that is where the market is going," Betway's Nigeria supervisor Lere Awokoya said.

"The development in the number of fintechs, and the federal government as an enabler, has helped the service to prosper. These technological shifts encouraged Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze worked up by Nigeria's participation worldwide Cup state they are finding the payment systems created by regional start-ups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the main platform used by businesses operating in Nigeria.

"We added Paystack as one of our payment options with no excitement, without revealing to our consumers, and within a month it shot up to the top most secondhand payment alternative on the website," said Akin Alabi, founder of NairabBET.

He said NairaBET, the country's second most significant sports betting firm, now had 2 million routine clients on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was included late 2017.

Paystack was set up by two Nigerian computer technology 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 financiers including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, stated the number of 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 each and every single month," stated Emmanuel Quartey, Paystack's head of development.

He said a community of developers had emerged around Paystack, developing software to integrate the platform into websites. "We have actually seen a development in that neighborhood and they have actually carried us along," said Quartey.

Paystack said it enables payments for a variety of sports betting companies however also a broad variety of companies, from utility services to transfer companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme along with investor 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 accompanied the arrival of foreign financiers wishing to tap into sports betting wagering.

Industry professionals state the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service is more established.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last two years while Italy's Goldbet was ahead of the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm introduced in 2015.

NairaBET's Alabi said its sales were split in between shops and online however the ease of electronic payments, cost of running stores and capability for clients to prevent the stigma of gaming in public meant online transactions 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 since numerous consumers still stay reluctant to spend online.

He stated the business, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian wagering shops often serve as social hubs where consumers can see soccer totally free of charge while putting bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, lots of soccer fans collected to enjoy Nigeria's final heat up 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 ago and bets approximately 1,000 naira a day.

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