This question always been on my mind and I never truly understood the concept. I’ve done some digging and haven’t found the answer that is comprehensive.
I want to understand at what point does a bank issue the physical currency from a cardholders digital payment to a merchant.
For example, if I deposit 25$ into a Chase checking account and then I order something for 25$ from a store far away, I understand the banker will transfer funds digitally but they still have the physical 25$.
So what happens to the 25$ in this card holder's account? Does the banker keep it or do they physically transport it to the merchant later?