The Libra Association is technically the central bank for Libra cryptocurrency. It is made of 28 founding members including MasterCard. How will MasterCard benefit from being part of the association?
They are ensuring their long term survival. MasterCard is a payment processor. They make their money on transaction fees on each MasterCard credit card & debit card transaction. Last year they made $15 billion in revenue. Libra attempts to replace credit cards & debits cards. Libra will bypass services like MasterCard, Visa & American Express when making payments to merchants. Unlike MasterCard, Libra charges 0 fees in transactions. This gives significant incentives for merchants to jump on board. More merchants adopt Libra, the revenue for card processors decreases. This is a massive threat to MasterCard’s business.
There is potential for cryptocurrency to have a significant impact in world financial systems. With a potential user base of 2.3 billion waiting to adopt Libra, credit card processors are at a disadvantage of being obsolete. With MasterCard being part of the organization that hopes to make them obsolete, they can ensure their survival by voting on critical decisions in the organization. MasterCard is to earn possible dividends on interest on the reserve fund. MasterCard has the benefit of having early access to the Libra infrastructure to adapt it to a new type card that can make payments in cryptocurrency.
To conclude, this could be the primary motive for MasterCard injecting $10 million to a non-profit organization to have a seat at the table.