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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria mainly thanks to payment systems developed by homegrown technology firms that are starting to make online organizations more viable.
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For many years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa money transfers have cultivated a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have held Nigerian online consumers back but wagering companies states the new, fast digital payment systems underpinning their websites are altering attitudes towards online transactions.

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

“The operators will go with whoever is quicker, whoever can link 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.
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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 central bank and certified banks.

In 2016, there were 14 million web payments worth an overall 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, increasing smart phone usage and falling data costs, Nigeria has actually long been seen as an excellent opportunity for online organizations - once customers feel comfy with electronic payments.

Online gaming companies say that is happening, though reaching the tens of millions of Nigerians without access to banking services stays a challenge 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 launched in Nigeria in January.

“There is a gradual shift to online now, that is where the market is going,” Betway’s Nigeria manager Lere Awokoya stated.

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

FINTECH COMPETITION

sports betting companies cashing in on the soccer frenzy worked up by Nigeria’s participation in the World Cup say they are finding the payment systems by local start-ups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both established in 2016, are supplying competition for Nigeria’s Interswitch which was set up in 2002 and was the main platform utilized by organizations running in Nigeria.

“We added Paystack as one of our payment choices without any excitement, without announcing to our clients, and within a month it shot up to the primary most pre-owned payment alternative on the site,” said Akin Alabi, founder of NairabBET.

He stated NairaBET, the country’s second greatest wagering company, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice given that it was added in late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who received early phase financing in Silicon Valley’s Y-Combinator programme.

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 mad Ikeja district of Lagos, said the number of monthly 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 each and every single month,” said Emmanuel Quartey, Paystack’s head of growth.

He said an environment of developers had actually emerged around Paystack, producing software to incorporate the platform into websites. “We have actually seen a growth because community and they have actually carried us along,” said Quartey.
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Paystack said it enables payments for a number of wagering companies but likewise a wide variety of services, from energy services to transport business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator program in addition to investor Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million in 2015.
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FOREIGN INVESTMENT

Shifts in Nigeria’s payment culture have corresponded with the arrival of foreign financiers hoping to take advantage of sports betting wagering.

Industry professionals say the sector generates 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 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 between shops and online but the ease of electronic payments, expense of running shops and capability for customers to avoid the preconception 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 - stated it was important to have a store network, not least since many clients still remain reluctant to invest online.

He said the business, with about 60 percent of Nigeria’s sports betting wagering market, had a substantial network. Nigerian wagering shops frequently function as social centers where customers can view soccer complimentary of charge while placing bets.

At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to view Nigeria’s last heat up video game before the World Cup.
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Richard Onuka, a factory employee who earns 25,000 naira a month, was focused on a television screen inside. He stated he began sports betting 3 months ago and bets as much as 1,000 naira a day.

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