By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting wagering is growing in soccer-mad Nigeria largely thanks to payment systems established by homegrown innovation firms that are starting to make online services more viable.

For several years, mobile payments stopped working to remove 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 sluggish internet speeds have actually held Nigerian online consumers back but sports betting companies says the brand-new, quick digital payment systems underpinning their websites are changing attitudes towards online deals.

“We have seen considerable development in the variety of payment solutions that are offered. All that is definitely changing the gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s commercial capital.

“The operators will go with whoever is quicker, whoever can connect to their platform with less issues and problems,” he said, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth has actually been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, increasing cellphone use and falling data expenses, Nigeria has long been seen as a terrific opportunity for online companies - once consumers feel comfy with electronic payments.

Online gaming companies say that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays a difficulty for pure online merchants.

British online wagering company Betway opened its first African organization 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 market is going,” Betway’s Nigeria manager Lere Awokoya said.

“The growth in the number of fintechs, and the government as an enabler, has actually helped the business to flourish. These technological shifts encouraged Betway to start running in Nigeria,” he stated.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze whipped up by Nigeria’s involvement worldwide Cup state they are discovering the payment systems produced by local startups such as Paystack are showing 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 main platform used by businesses operating in Nigeria.

“We included Paystack as one of our payment options without any fanfare, without revealing to our clients, and within a month it soared to the number one most used payment alternative on the website,” said Akin Alabi, creator of NairabBET.

He said NairaBET, the nation’s second greatest sports betting firm, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative given that it was included in late 2017.

Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early stage 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.
bet9ja.com
Paystack, based in the mad Ikeja district of Lagos, said the variety of monthly 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,” said Emmanuel Quartey, Paystack’s head of growth.
bet9ja.com
He said a community of designers had actually emerged around Paystack, developing software application to incorporate the platform into sites. “We have actually seen a growth in that neighborhood and they have brought us along,” stated Quartey.

Paystack stated it allows payments for a number of sports betting companies but likewise a large range of businesses, from utility services to carry companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme in addition to venture capitalists 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 accompanied the arrival of foreign investors intending to tap into sports betting.

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

Russia’s 1XBet and Slovakia’s DOXXbet have both set up in Nigeria in the last 2 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.
bit.ly
NairaBET’s Alabi stated its sales were divided in between shops and online however the ease of electronic payments, cost of running shops and ability for to prevent the stigma of sports betting in public meant 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 shop network, not least due to the fact that numerous clients still remain hesitant to invest online.

He stated the business, with about 60 percent of Nigeria’s sports betting market, had a substantial network. Nigerian wagering shops frequently function as social centers where consumers can see soccer totally free of charge while placing bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans collected to see Nigeria’s last heat up game before the World Cup.

Richard Onuka, a factory worker who earns 25,000 naira a month, was focused on a TV screen inside. He stated he began sports betting three months ago and bets up to 1,000 naira a day.

“Since I have been playing I have 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