What type of transactions does digital money typically involve?

Digital money primarily involves software-based secure credit card transactions. This type of transaction utilizes digital platforms and technologies to facilitate payments that are often processed through secure servers. When customers make payments through digital wallets, online banking, or other electronic payment methods, their payment information is encrypted and securely transmitted over the internet to authorize and complete the transaction.

Digital money effectively encompasses a range of electronic payment methods, including credit and debit card transactions conducted online or through mobile applications. These methods leverage advanced security protocols and software systems to ensure the integrity of the transaction, protect sensitive information, and provide a seamless experience for users.

In contrast, the other options represent methods of handling money that do not align with the characteristics of digital money transactions. For example, physical currency exchanges involve tangible cash, while borrowing from financial institutions relates to credit transactions rather than payment processing. Non-encrypted cash transfers do not reflect the secure methods associated with digital transactions, as they lack the necessary security features that protect both the consumer and the merchant.