By Alexis Akwagyiram and Didi Akinyelure

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

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 promoted a culture of cashless payments.

Fear of electronic fraud and sluggish web speeds have actually held Nigerian online customers back however sports betting firms states the brand-new, quick digital payment systems underpinning their websites are changing mindsets towards online transactions.

"We have actually seen considerable development in the number of payment options that are offered. All that is absolutely altering the gaming area," said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria's business capital.

"The operators will opt for whoever is quicker, whoever can connect to their platform with less issues and glitches," he said, adding that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That development has been matched by a rise in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the main 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 mobile phone use and falling information expenses, Nigeria has long been seen as a terrific opportunity for online businesses - once customers feel comfortable with electronic payments.

Online gaming firms say that is occurring, though reaching the 10s of countless Nigerians without access to banking services stays a challenge for pure online sellers.

British online sports betting firm Betway opened its first African organization 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 industry is going," Betway's Nigeria supervisor Lere Awokoya stated.

"The growth in the number of fintechs, and the federal government as an enabler, has actually assisted business to prosper. These technological shifts motivated Betway to begin running in Nigeria," he said.

FINTECH COMPETITION

sports betting firms capitalizing the soccer craze worked up by Nigeria's participation worldwide Cup say they are finding the payment systems produced by regional startups such as Paystack are proving popular online.

Paystack and another local start-up Flutterwave, both established in 2016, are supplying competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform used by services operating in Nigeria.

"We added Paystack as one of our payment alternatives without any excitement, without revealing to our clients, and within a month it soared to the primary most secondhand payment choice on the website," said Akin Alabi, creator of NairabBET.

He stated NairaBET, the nation's second most significant wagering firm, now had 2 million regular consumers on its site, up from 500,000 in 2013, and Paystack remained the most popular payment alternative since it was included late 2017.

Paystack was set up by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage financing in Silicon Valley's Y-Combinator program.

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 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 every single month," said Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of developers had emerged around Paystack, developing software application to integrate the platform into websites. "We have actually seen a growth in that neighborhood and they have brought us along," stated Quartey.

Paystack said it makes it possible for payments for a variety of sports betting firms but also a large range of services, from energy services to transport companies to insurer Axa Mansard.

Flutterwave, co-founded by Nigerian business owner 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 last year.

FOREIGN INVESTMENT

Shifts in Nigeria's payment culture have corresponded with the arrival of foreign financiers intending to take advantage of 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 company is more developed.

Russia's 1XBet and Slovakia's DOXXbet have both established in Nigeria in the last two years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET's Alabi said its sales were split between shops and online however the ease of electronic payments, expense of running stores and ability for clients to prevent the preconception of sports betting in public suggested online transactions 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 since many consumers still stay unwilling to invest online.

He said the company, with about 60 percent of Nigeria's sports betting wagering market, had a substantial network. Nigerian sports betting shops frequently function as social centers where consumers can view soccer totally free of charge while putting bets.

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

Richard Onuka, a factory employee 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 approximately 1,000 naira a day.

"Since I have been playing I have not won anything however I think that a person day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)