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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is expanding in soccer-mad Nigeria mainly thanks to payment systems developed by technology companies that are starting to make online services more viable.
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For many 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 actually cultivated a culture of cashless payments.

Fear of electronic fraud and slow internet speeds have held Nigerian online customers back however wagering firms says the brand-new, quick digital payment systems underpinning their sites are altering mindsets towards online transactions.

“We have seen significant growth in the variety of payment solutions that are readily available. All that is definitely changing the gaming space,” stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria’s industrial capital.

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

That development 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 reserve bank and licensed 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 first quarter of 2018 there were nearly 10 million worth 61 billion.

With a young population of nearly 190 million, rising smart phone use and falling information expenses, Nigeria has actually long been seen as an excellent opportunity for online businesses - once customers feel comfy with electronic payments.

Online gambling firms say that is taking place, though reaching the 10s of countless Nigerians without access to banking services stays an obstacle for pure online sellers.
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British online wagering firm Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.

“There is a gradual 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 government as an enabler, has helped the service to grow. These technological shifts motivated Betway to begin operating in Nigeria,” he said.

FINTECH COMPETITION

sports betting firms cashing in on the soccer craze whipped up by Nigeria’s involvement worldwide Cup state they are finding the payment systems developed by regional start-ups such as Paystack are proving popular online.

Paystack and another regional startup Flutterwave, both founded in 2016, are supplying competition for Nigeria’s Interswitch which was set up in 2002 and was the main platform used by companies operating in Nigeria.

“We added Paystack as one of our payment choices without any excitement, without revealing to our customers, and within a month it shot up to the number one most used payment choice on the site,” stated Akin Alabi, creator of NairabBET.

He said NairaBET, the country’s 2nd greatest wagering firm, now had 2 million routine consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative considering that it was included late 2017.

Paystack was set up by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early stage financing in Silicon Valley’s Y-Combinator program.

In December 2016, it raised $1.3 million from investors 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 rose 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,” said Emmanuel Quartey, Paystack’s head of development.

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

Paystack stated it makes it possible for payments for a number of sports betting firms but likewise a broad range of organizations, from utility services to transport business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator program as well as 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 investors wishing to use sports betting wagering.

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

Russia’s 1XBet and Slovakia’s DOXXbet have actually both established in Nigeria in the last two years while Italy’s Goldbet led the pattern, 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 shops and capability for clients to prevent the stigma of sports betting in public meant online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was necessary to have a shop network, not least since many customers still stay hesitant to spend online.

He stated the business, with about 60 percent of Nigeria’s sports betting wagering market, had a substantial network. Nigerian sports betting stores often serve as social hubs where clients can watch soccer free of charge while placing bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to enjoy Nigeria’s final heat up video game before the World Cup.
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Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a television screen inside. He stated he started sports betting 3 months back 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,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos