By Alexis Akwagyiram and Didi Akinyelure
bet9ja.com
LAGOS, June 25 (Reuters) - Online sports betting is growing in soccer-mad Nigeria largely thanks to payment systems developed by homegrown innovation companies that are beginning to make online organizations more viable.
bit.ly
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 scams and slow web speeds have actually held Nigerian online customers back however sports betting companies states the new, fast digital payment systems underpinning their sites are changing mindsets towards online deals.

“We have seen substantial growth in the number of payment solutions that are readily available. All that is absolutely changing the video gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s industrial capital.

“The operators will choose whoever is faster, whoever can link to their platform with less problems and problems,” he stated, including that taxes from sports betting wagering 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 data 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 leapt to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were almost 10 million worth 61 billion.

With a young population of almost 190 million, increasing smart phone use and falling data costs, Nigeria has actually long been seen as a terrific chance for online services - once consumers feel comfortable with electronic payments.

Online sports betting firms say that is occurring, though reaching the 10s of countless Nigerians without access to banking services remains an obstacle for pure online sellers.
bit.ly
British online wagering firm Betway opened its first African organization 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 market is going,” Betway’s Nigeria supervisor Lere Awokoya said.
bet9ja.com
“The development in the number of fintechs, and the government as an enabler, has actually helped business to flourish. These technological shifts motivated Betway to start operating in Nigeria,” he stated.

FINTECH COMPETITION
bit.ly
sports betting companies cashing in on the soccer craze worked up by Nigeria’s involvement on the planet Cup say they are discovering the payment systems created by local start-ups such as Paystack are showing popular online.

Paystack and another regional start-up Flutterwave, both established in 2016, are supplying competitors for Nigeria’s Interswitch which was set up in 2002 and was the primary platform utilized by companies operating in Nigeria.

“We included Paystack as one of our payment choices with no fanfare, without revealing to our customers, and within a month it soared to the number one most secondhand payment choice on the website,” said Akin Alabi, creator of NairabBET.

He said NairaBET, the country’s 2nd biggest wagering firm, now had 2 million regular clients on its website, up from 500,000 in 2013, and Paystack stayed the most popular payment alternative because it was added in late 2017.

Paystack was established by 2 Nigerian computer technology graduates, Shola Akinlade and Ezra Olubi, who got early stage 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, said the number of month-to-month transactions 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,” stated Emmanuel Quartey, Paystack’s head of development.

He stated a community of designers had actually emerged around Paystack, developing software application to incorporate the platform into sites. “We have seen a growth because community and they have carried us along,” said Quartey.
bit.ly
Paystack stated it enables payments for a variety of sports betting firms but 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 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 actually accompanied the arrival of foreign investors wishing to tap into sports betting.

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

Russia’s 1XBet and Slovakia’s DOXXbet have both established in Nigeria in the last two years while Italy’s Goldbet was ahead of the pattern, taking a 50 percent stake in market leader Bet9ja when the Nigerian company introduced in 2015.

NairaBET’s Alabi said its sales were divided in between stores and online however the ease of electronic payments, cost of running shops and ability for clients to avoid the preconception of gambling in public implied online deals would grow.

But despite advances in digital payments, Kunle Soname - and co-founder of Bet9ja - said it was essential to have a store network, not least because lots of consumers still stay unwilling to invest online.

He stated the company, with about 60 percent of Nigeria’s sports betting market, had a comprehensive network. Nigerian wagering shops frequently act as social hubs where consumers can see soccer totally free of charge while putting bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a television screen inside. He said he started gambling three months earlier 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