By Alexis Akwagyiram and Didi Akinyelure

LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria mainly thanks to payment systems established by homegrown technology companies that are beginning to make online services more viable.

For years, mobile payments failed to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa cash transfers have cultivated a culture of cashless payments.

Fear of electronic scams and slow internet speeds have held Nigerian online customers back but wagering companies says the new, quick digital payment systems underpinning their sites are changing attitudes towards online deals.

"We have seen substantial growth in the number of payment options that are readily available. All that is definitely changing the gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's business capital.

"The operators will choose whoever is much faster, whoever can link to their platform with less concerns and problems," he stated, including that taxes from sports betting wagering in Lagos State rose 30 percent to 40 percent in 2017 from 2016.

That growth has been matched by an increase 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 a total 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 nearly 10 million worth 61 billion.

With a young population of almost 190 million, rising cellphone use and falling data expenses, Nigeria has long been seen as a terrific chance for online businesses - once consumers feel comfortable with electronic payments.

Online gaming companies state that is taking place, though reaching the tens of millions of Nigerians without access to banking services stays an obstacle for pure online retailers.

British online sports betting company Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched 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 said.

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

FINTECH COMPETITION

sports betting companies capitalizing the soccer frenzy worked up by Nigeria's involvement on the planet Cup say they are finding the payment systems produced by local startups such as Paystack are showing popular online.

Paystack and another local startup Flutterwave, both established in 2016, are offering competitors for Nigeria's Interswitch which was set up in 2002 and was the main platform used by organizations operating in Nigeria.

"We included Paystack as one of our payment choices with no excitement, without revealing to our customers, and within a month it shot up to the top most secondhand payment option on the site," said Akin Alabi, creator of NairabBET.

He said NairaBET, the country's second most significant sports betting firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment choice because it was included in late 2017.

Paystack was established by two Nigerian computer system science graduates, Shola Akinlade and Ezra Olubi, who got 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, stated the number of month-to-month 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 every month," stated Emmanuel Quartey, Paystack's head of development.

He stated an environment of developers had emerged around Paystack, developing software application to integrate the platform into sites. "We have seen a development in that community and they have actually carried us along," stated Quartey.

Paystack stated it allows payments for a number of wagering companies however likewise a wide variety of organizations, from utility services to carry business to insurance company Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme along with 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 financiers wanting to use sports betting wagering.

Industry experts say the sector generates about $1 billion a year and is most likely to grow faster than in South Africa and Kenya where the service is more developed.

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 half stake in market leader Bet9ja when the Nigerian company launched in 2015.

NairaBET's Alabi stated its sales were split between stores and online however the ease of electronic payments, cost of running stores and ability for customers to prevent the stigma of gaming in public implied online transactions would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - said it was necessary to have a store network, not least because lots of clients still remain hesitant to spend online.

He stated the company, with about 60 percent of Nigeria's sports betting wagering market, had an extensive network. Nigerian wagering stores often serve as social hubs where customers can see soccer totally free of charge while positioning bets.

At a BetKing hall deep inside the dynamic Oshodi market in Lagos, dozens of soccer fans gathered to enjoy Nigeria's final heat up video game before the World Cup.

Richard Onuka, a factory worker who makes 25,000 naira a month, was focused on a TV screen inside. He stated he began sports betting three months ago and bets up to 1,000 naira a day.

"Since I have actually been playing I have actually not won anything but I think that one day I will win," stated Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; modifying by David Clarke)