What happens to cash when you make an online purchase?

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When you buy something online or with a credit card, what happens to the physical money that the transaction represents? Are there just trucks of money being carted around to different banks? Does the number I see on my bank about even represent real, physical cash?

In: Economics

6 Answers

Anonymous 0 Comments

There is no real physical money involved here. There are only credits and debits.

Banking is done on many different levels and the majority of the transactions occur between a small handful of very large commercial/business banks. But there’s still no bucketloads of cash and coin. It’s just data.

(Source: My partner works in FiTech. I’ve had to learn more about debits and credits and messages and ingoing and outgoing than I ever thought I’d need to know, just in order to discuss his work with him.)

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