By Alexis Akwagyiram and Didi Akinyelure
LAGOS, June 25 (Reuters) - Online sports betting is expanding in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are beginning to make online organizations more feasible.
For years, mobile payments stopped working to take off in Nigeria as they have in countries such as Kenya, where Safaricom's M-Pesa money transfers have fostered a culture of cashless payments.
Fear of electronic scams and slow internet speeds have held Nigerian online customers back but sports betting companies states the new, quick digital payment systems underpinning their sites are changing mindsets towards online transactions.
"We have seen significant development in the number of payment solutions that are offered. All that is absolutely altering the gaming area," stated Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.
"The operators will choose whoever is quicker, whoever can connect to their platform with less issues and problems," he stated, including that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
That development has actually been matched by an increase in web payments, according to information from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the reserve 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 first quarter of 2018 there were nearly 10 million worth 61 billion.
With a young population of almost 190 million, increasing mobile phone use and falling data expenses, Nigeria has actually long been seen as a fantastic opportunity for online companies - once consumers feel comfortable with electronic payments.
Online gambling companies state that is happening, though reaching the 10s of millions of Nigerians without access to banking services remains a difficulty for pure online sellers.
British online sports betting company Betway opened its very first African company in Kenya in 2015, followed by Uganda, Ghana and South Africa. It introduced in Nigeria in January.
"There is a steady shift to online now, that is where the industry is going," Betway's Nigeria supervisor Lere Awokoya said.
"The development in the variety of fintechs, and the government as an enabler, has actually assisted the organization to prosper. These technological shifts motivated Betway to start operating in Nigeria," he stated.
FINTECH COMPETITION
sports betting firms capitalizing the soccer frenzy whipped up by Nigeria's participation on the planet Cup state they are discovering the payment systems produced by regional startups such as Paystack are proving popular online.
Paystack and another regional startup Flutterwave, both established in 2016, are offering competition for Nigeria's Interswitch which was established in 2002 and was the main platform utilized by organizations running in Nigeria.
"We added Paystack as one of our payment options with no fanfare, without revealing to our customers, and within a month it shot up to the number one most secondhand payment choice on the website," stated Akin Alabi, founder of NairabBET.
He stated NairaBET, the country's 2nd most significant wagering firm, now had 2 million regular consumers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was included late 2017.
Paystack was established by two Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early phase funding in Silicon Valley's Y-Combinator program.
In December 2016, it raised $1.3 million from financiers consisting of China's Tencent and Comcast Ventures in the United States.
Paystack, based in the frenetic Ikeja district of Lagos, stated the variety of month-to-month deals 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 every single month," said Emmanuel Quartey, Paystack's head of development.
He said an ecosystem of designers had actually emerged around Paystack, producing software to integrate the platform into sites. "We have actually seen a development in that 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 vast array of services, from energy services to transport business to insurance company Axa Mansard.
Flutterwave, co-founded by Nigerian business owner Iyinoluwa Aboyeji, is also backed by the Y-Combinator program in addition to 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 actually accompanied the arrival of foreign investors hoping to use sports betting wagering.
Industry professionals state the sector produces about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the company is more established.
Russia's 1XBet and Slovakia's DOXXbet have actually both established in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm released 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 consumers to avoid the stigma of sports betting in public meant online deals would grow.
But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was essential to have a shop network, not least because lots of clients still remain hesitant to invest online.
He stated the company, with about 60 percent of Nigeria's sports betting market, had a substantial network. Nigerian wagering stores typically function as social hubs where customers can enjoy soccer complimentary of charge while positioning bets.
At a BetKing hall deep inside the dynamic Oshodi market in Lagos, lots of soccer fans gathered to watch Nigeria's final warm up video game before the World Cup.
Richard Onuka, a factory employee who makes 25,000 naira a month, was focused on a TV screen inside. He stated he started gambling three months back and bets approximately 1,000 naira a day.
"Since I have actually been playing I have not won anything but I believe that a person day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)
