By - SpringPedal
You can use it as payment at terminals like you said but you can also send it to people via Messages. When you open up messages look at the bottom, tap the App icon, and then the Apple Pay symbol. You can then select an amount you want to send. If you want to use it for an online purchase as long as they accept Apple Pay it should be an option to select from your wallet. It only will work if the entire total is in your wallet, if something costs 25 but you only have 24 it won't let you split that payment.
Personally I like Venmo more because the UI to me is more straight forward but I have in the past paid for a burrito at Chipotle online via Apple Pay using Apple Cash. You can also transfer the amount to your bank account like Venmo.
To do that, open Wallet, go to the Apple Cash, tap three dots in the top right then transfer to bank.
Apple's own site has a brief FAQ at the bottom. A slight background is that Apple uses GreenDot as their processer/holder for the money. It is the same company that sells the "debit" cards at stores that you can load up with money and use for any purchase.