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By Alexis Akwagyiram and Didi Akinyelure
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LAGOS, June 25 (Reuters) - Online sports betting wagering is in soccer-mad Nigeria mainly thanks to payment systems established by homegrown innovation firms 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 nations such as Kenya, where Safaricom's M-Pesa cash transfers have actually promoted a culture of cashless payments.
Fear of electronic scams and sluggish internet speeds have held Nigerian online consumers back but wagering companies says the new, quick digital payment systems underpinning their sites are altering mindsets towards online deals.
"We have actually seen significant growth in the number of payment options that are offered. All that is definitely altering the video gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's industrial capital.
"The operators will go with whoever is quicker, whoever can link to their platform with less concerns 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 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 reserve bank and licensed 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 first quarter of 2018 there were nearly 10 million worth 61 billion.
With a young population of nearly 190 million, rising cellphone use and falling information costs, Nigeria has actually long been seen as a great opportunity for online companies - once customers feel comfy with electronic payments.
Online gambling firms say that is occurring, though reaching the 10s of millions of Nigerians without access to banking services stays a difficulty for pure online sellers.
British online wagering company Betway opened its first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It released in Nigeria in January.
"There is a steady shift to online now, that is where the market is going," Betway's Nigeria manager Lere Awokoya stated.
"The development in the number of fintechs, and the federal government as an enabler, has assisted business to grow. These technological shifts motivated Betway to start running in Nigeria," he said.
FINTECH COMPETITION
sports betting companies cashing in on the soccer frenzy whipped up by Nigeria's involvement on the planet Cup state they are finding the payment systems produced by local start-ups such as Paystack are showing popular online.
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Paystack and another local startup Flutterwave, both founded in 2016, are providing competitors for Nigeria's Interswitch which was established in 2002 and was the primary platform utilized by companies running in Nigeria.
"We added Paystack as one of our payment choices without any excitement, without announcing to our customers, and within a month it soared to the primary most secondhand payment alternative on the site," said Akin Alabi, creator of NairabBET.
He said NairaBET, the nation's second biggest sports betting company, now had 2 million routine customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment choice considering that it was included in late 2017.
Paystack was set up by two 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 frenetic Ikeja district of Lagos, said the number of monthly transactions 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 development.
He said a community of developers had emerged around Paystack, developing software to incorporate the platform into websites. "We have seen a development because neighborhood and they have actually carried us along," stated Quartey.
Paystack said it makes it possible for payments for a number of sports betting companies but likewise a wide variety of organizations, from utility services to carry business to insurance provider Axa Mansard.
Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme as well as 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 coincided with the arrival of foreign investors hoping to take advantage of sports betting wagering.
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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 developed.
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Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet was ahead of the trend, taking a half stake in market leader Bet9ja when the Nigerian firm released in 2015.
NairaBET's Alabi said its sales were divided in between stores and online but the ease of electronic payments, expense of running stores and ability for clients to prevent the stigma of sports betting in public indicated online deals would grow.
But despite advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least since lots of customers still stay hesitant to invest online.
He stated the business, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian sports betting stores typically act as social centers where consumers can view soccer totally free of charge while putting bets.
At a BetKing hall deep inside the busy Oshodi market in Lagos, dozens of soccer fans gathered to view Nigeria's last heat up video game before the World Cup.
Richard Onuka, a factory employee who makes 25,000 naira a month, was fixated on a TV screen inside. He stated he began sports betting 3 months back and bets approximately 1,000 naira a day.
"Since I have actually been playing I have not won anything however I believe that a person day I will win," said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos
This will delete the page "Online Betting Firms Gamble on Soccer-mad Nigeria"
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