By Alexis Akwagyiram and Didi Akinyelure

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

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

Fear of electronic scams and sluggish web speeds have held Nigerian online consumers back however wagering companies states the new, quick digital payment systems underpinning their websites are altering attitudes towards online deals.

"We have seen considerable growth in the number of payment solutions that are readily available. All that is definitely changing the gaming space," stated 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 connect to their platform with less problems and glitches," he stated, adding 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 central 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 almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone use and falling data costs, Nigeria has long been viewed as a terrific chance for online businesses - once customers feel comfy with electronic payments.

Online sports betting firms state that is happening, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online retailers.

British online sports betting company Betway opened its first African company 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 market is going," Betway's Nigeria manager Lere Awokoya said.

"The development in the number of fintechs, and the federal government as an enabler, has helped the business to grow. These technological shifts encouraged Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer frenzy worked up by Nigeria's involvement in the World Cup state they are finding the payment systems developed by local start-ups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both established in 2016, are providing competition for Nigeria's Interswitch which was set up in 2002 and was the primary platform used by businesses operating in Nigeria.

"We added Paystack as one of our payment options with no excitement, without revealing to our customers, and within a month it shot up to the top most pre-owned payment option on the website," stated Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second greatest wagering firm, now had 2 million routine consumers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice since it was added in late 2017.

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

In December 2016, it raised $1.3 million from investors consisting of China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, stated the variety of monthly 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 each and every single month," said Emmanuel Quartey, Paystack's head of growth.

He stated an environment of developers had actually emerged around Paystack, producing software to incorporate the platform into websites. "We have actually seen a development because community and they have actually brought us along," stated Quartey.

Paystack stated it allows payments for a number of sports betting firms however also a vast array of organizations, from energy services to carry companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme in addition to 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 investors wanting to tap into sports betting.

Industry experts state the sector creates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the 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 50 percent stake in market leader Bet9ja when the Nigerian firm released in 2015.

NairaBET's Alabi said its sales were split in between shops and online however the ease of electronic payments, expense of running stores and ability for consumers to avoid the stigma of sports betting 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 crucial to have a shop network, not least since many customers still remain hesitant to spend online.

He said the company, with about 60 percent of Nigeria's sports betting market, had a comprehensive network. Nigerian wagering stores often function as social centers where clients can watch soccer free of charge while positioning bets.

At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans collected to see Nigeria's final heat up video game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a television screen inside. He said he began sports betting three months back and bets up to 1,000 naira a day.

"Since I have 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; editing by David Clarke)