bit.ly
By Alexis Akwagyiram and Didi Akinyelure
bet9ja.com
LAGOS, June 25 (Reuters) - Online sports betting is booming in soccer-mad Nigeria mostly thanks to payment systems developed by homegrown innovation companies that are beginning to make online organizations more practical.
bit.ly
For years, mobile payments stopped working to remove in Nigeria as they have in nations such as Kenya, where Safaricom's M-Pesa money transfers have cultivated a culture of cashless payments.

Fear of electronic scams and slow web speeds have held Nigerian online customers back however sports betting firms says the new, fast digital payment systems underpinning their sites are altering mindsets towards online deals.

"We have actually seen considerable development in the variety of payment solutions that are available. All that is absolutely altering the video gaming space," said Seun Anibaba, CEO of Lagos State Lotteries Board, video gaming regulator in Nigeria's commercial capital.

"The operators will choose whoever is faster, whoever can connect to their platform with less issues and glitches," he stated, including that taxes from sports betting in Lagos State increased 30 percent to 40 percent in 2017 from 2016.

That growth has 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 a total 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 long been viewed as a fantastic chance for online services - once customers feel comfy with electronic payments.

Online sports betting firms state that is happening, though reaching the tens of millions of Nigerians without access to banking services remains a difficulty for pure online retailers.

British online wagering company 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 progressive shift to online now, that is where the industry is going," Betway's Nigeria manager Lere Awokoya said.

"The growth in the number of fintechs, and the federal government as an enabler, has helped the company to flourish. These technological shifts encouraged Betway to start operating in Nigeria," he stated.

FINTECH COMPETITION

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

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

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

He said NairaBET, the country's second greatest sports betting firm, now had 2 million regular clients on its site, up from 500,000 in 2013, and Paystack remained the most popular payment option given that it was added in 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 including China's Tencent and Comcast Ventures in the United States.

Paystack, based in the frenetic Ikeja district of Lagos, said the variety of month-to-month deals 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 every single month," said Emmanuel Quartey, Paystack's head of growth.

He said an ecosystem of developers had actually emerged around Paystack, creating software to integrate the platform into websites. "We have seen a development because neighborhood and they have brought us along," said Quartey.

Paystack said it makes it possible for payments for a variety of wagering firms however likewise a vast array of organizations, from energy services to transport business to insurance provider Axa Mansard.

Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is likewise backed by the Y-Combinator programme 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 accompanied the arrival of foreign investors intending to use sports betting.

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 organization is more developed.

Russia's 1XBet and Slovakia's DOXXbet have actually both set up in Nigeria in the last 2 years while Italy's Goldbet led the pattern, taking a half stake in market leader Bet9ja when the Nigerian firm launched in 2015.

stated its sales were divided in between stores and online but the ease of electronic payments, cost of running stores and capability for customers to avoid the stigma of sports betting in public implied online deals would grow.

But regardless of advances in digital payments, Kunle Soname - chairman and co-founder of Bet9ja - stated it was very important to have a shop network, not least since many clients still remain unwilling to spend 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 centers where consumers can watch soccer totally free of charge while positioning bets.

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

Richard Onuka, a factory employee who earns 25,000 naira a month, was fixated on a TV screen inside. He stated he began sports betting 3 months earlier and bets as much as 1,000 naira a day.

"Since I have actually been playing I have actually 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