By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is flourishing in soccer-mad Nigeria mostly thanks to payment systems established by homegrown technology firms that are beginning to make online companies more feasible.
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For years, mobile payments failed to take off in Nigeria as they have in nations such as Kenya, where Safaricom’s M-Pesa cash transfers have actually fostered a culture of cashless payments.
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Fear of electronic scams and slow internet speeds have held Nigerian online customers back however wagering firms says the new, fast digital payment systems underpinning their websites are altering mindsets towards online deals.

"We have seen significant development in the variety of payment solutions that are available. All that is definitely altering the video gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s industrial capital.

"The operators will opt for whoever is quicker, whoever can connect to their platform with less concerns and glitches,” he stated, including 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 a rise in web payments, according to information 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 leapt 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 smart phone use and falling data costs, Nigeria has actually long been viewed as a fantastic chance for online organizations - once customers feel comfortable with electronic payments.

Online gambling companies state that is happening, though reaching the tens of millions of Nigerians without access to banking services remains an obstacle for pure online sellers.

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 manager Lere Awokoya stated.
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"The growth in the variety of fintechs, and the government as an enabler, has actually helped business to thrive. These technological shifts encouraged Betway to start running in Nigeria,” he stated.

FINTECH COMPETITION

sports betting companies cashing in on the soccer craze whipped up by Nigeria’s involvement worldwide Cup say they are finding the payment systems created by local startups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both founded in 2016, are providing competition for Nigeria’s Interswitch which was established in 2002 and was the primary platform utilized by businesses running in Nigeria.

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

He said NairaBET, the country’s second greatest wagering company, now had 2 million routine customers on its site, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative since it was included late 2017.

Paystack was set up by 2 Nigerian computer science 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 mad Ikeja district of Lagos, said the number of month-to-month transactions 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 month,” said Emmanuel Quartey, Paystack’s head of development.

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

Paystack stated it makes it possible for payments for a variety of wagering firms however likewise a broad range of businesses, from utility services to transport business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to 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 actually accompanied the arrival of foreign financiers wanting to tap into sports betting wagering.

Industry experts say 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 developed.

Russia’s 1XBet and Slovakia’s DOXXbet have both established in Nigeria in the last 2 years while Italy’s Goldbet was ahead of the pattern, taking a half stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET’s Alabi stated its sales were split in between stores and online however the ease of electronic payments, cost of running shops and ability for clients to prevent the stigma of gambling in public meant online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was important to have a store network, not least due to the fact that lots of customers still stay unwilling to invest online.

He stated the company, with about 60 percent of Nigeria’s sports betting wagering market, had a comprehensive network. Nigerian sports betting stores typically serve as social centers where clients can see soccer free of charge while putting bets.

At a BetKing hall deep inside the market in Lagos, lots of soccer fans collected to view Nigeria’s final heat up game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He stated he began sports betting three months earlier and bets as much as 1,000 naira a day.

"Since I have been playing I have not won anything but I think that one day I will win,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos