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 established by homegrown technology companies that are starting to make online companies more practical.

For several 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 promoted a culture of cashless payments.

Fear of electronic scams and slow web speeds have held Nigerian online customers back however wagering companies states the brand-new, quick digital payment systems underpinning their websites are altering mindsets towards online transactions.

"We have seen considerable development in the number of payment options that are offered. All that is definitely changing the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

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

That development has been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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 very first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, rising mobile phone use and falling information costs, Nigeria has actually long been seen as a fantastic opportunity for online services - once customers feel comfortable with electronic payments.

Online gaming firms say that is occurring, though reaching the 10s of countless Nigerians without access to banking services remains a difficulty for pure online merchants.

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 progressive 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 federal government as an enabler, has assisted business to prosper. These technological shifts motivated Betway to start operating in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's involvement worldwide Cup state they are discovering the payment systems developed by local startups such as Paystack are showing popular online.

Paystack and another local start-up Flutterwave, both founded in 2016, are providing competition for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by services operating in Nigeria.

"We added Paystack as one of our payment choices with no excitement, without announcing to our clients, and within a month it shot up to the number one most pre-owned payment option on the site," said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation's second greatest wagering firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment choice because it was added in late 2017.

Paystack was set up by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who received 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, said the number of month-to-month deals 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 every single month," said Emmanuel Quartey, Paystack's head of growth.

He said a community of developers had actually emerged around Paystack, creating software to incorporate the platform into sites. "We have seen a growth in that community and they have brought us along," stated Quartey.

Paystack stated it allows payments for a variety of wagering companies but likewise a large range of businesses, from energy 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 programme in addition to investor 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 financiers wishing to use sports betting.

Industry professionals say the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the organization is more established.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet led the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

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

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was very important to have a store network, not least because many clients still stay reluctant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had a comprehensive network. Nigerian wagering stores often serve as social centers where clients 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 collected to watch Nigeria's final warm up video game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He said he started gambling three months ago and bets up to 1,000 naira a day.

"Since I have actually been playing I have actually not won anything however 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)