To convert a column to a different data type, use a command like:
ALTER TABLE products ALTER COLUMN price TYPE numeric(10,2);
This will succeed only if each existing entry in the column can be converted to the new type by an implicit cast. If a more complex conversion is needed, you can add a USING clause that specifies how to compute the new values from the old.
PostgreSQL will attempt to convert the column's default value (if any) to the new type, as well as any constraints that involve the column. But these conversions might fail, or might produce surprising results. It's often best to drop any constraints on the column before altering its type, and then add back suitably modified constraints afterwards.