After thinking about this for a bit, I can see Mastercard's point of view, but I'd say the "more secure than passwords" thing probably only applies to their business model and close copies.
First, remember that the way you used to pay with a credit card is to hand it over to someone in a store, who would physically create a rub-through copy of the card and let you walk away with your purchase. No risk for you at all, lot of risk for the credit card company if it turned out later that the card was stolen. But the risk was manageable, because most cards weren't stolen, and a stolen card once in a while didn't offset the earnings too much.
Along came phone and online payment systems, and now it became much worse - instead of having to be in physical possession of a card that looked legit, all you needed was a name, a card number and possibly a postal code. All things that could easily be stolen, looked up and shared online. I don't know for sure, but this must have increased the risk for credit card companies dramatically.
If Mastercard can establish their own smartphone app as the main way you use your credit card for payment (by making it very easy for all parties involved), there will be much less stolen cc details floating around.
The selfie/app combination thing doesn't have to be perfect for this to work; it doesn't even have to be very secure at all. It doesn't matter whether you can fool the app by holding a picture of someone in front of the camera and so on, because it's about the big picture - and in the big picture, credit card thieves currently don't steal credit cards from people's wallets and then sell them on the internet - they steal credit card details by the million from hacked online databases. So that's the threat they need to counter most - worrying about people's smartphones getting stolen or misused by acquaintances simply doesn't seem very relevant compared to that.
So if your evil twin manages to trick your app into letting him buy something, or a couple of tricksters talk some acquaintances into lending them their phones and manage to take a picture of them with the payment app, the credit card company won't care - it will just do what it always did, and reimburse the damaged party (and then happily recover the loss from said evil twin/acquaintance, since the evildoers are now socially connected to the victim and therefore easier to identify - but that's an aside). What it really cares about is the huge losses it sustains by stolen cc info, and a reasonably secure app sitting on every customer's smartphone which is used for online payments, instead of the customer handing a hundred different online stores his cc details, will massively reduce the risk for the credit card company.
So I'd say it's not about whether selfies are more secure than passwords or not - I think the actual reason they do this is because selfies are faster and easier than typing your password on a smartphone keyboard, and possibly user friendly enough so that using your smartphone app to pay instead of having to login into an online account and entering your cc details becomes preferable to many cc owners.