You can pay with Apple Pay using the funds in Apple Cash, so I use it for, ironically, Apple Gift cards using the Target.com app that accepts Apple Pay.
[edit: if you’re earning Apple Cash from your Apple Card, you could apply the Apple Cash toward your balance when you make a payment. I do the gift card thing so I can move the earned funds (including rewards from other cards) into my Apple ID account for “rainy day” stuff. I’m weird and even track all that in my accounting app. 😂]
When you set up Apple Cash, you can send money to people you know. You can also make purchases when you use Apple Cash with Apple Pay or when you use your virtual card number wherever Visa is accepted.
I wonder if the mix up was because she used a credit card and not a debit. She sent the Apple Cash to her bank and will end it. Then back to Apple Pay.