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Do not use your payment information to make a purchase on your friends account.
I haven't heard anyone complain about it not working. It should be fine to send a digital gift card.
Steam wallet gifting yes
I don't understand. Can he buy some expansions for his games if I send a 100 € Gift Card to him? Will 100 € be displayed as money in his wallet or somewhere else?
That money goes into their Steam Wallet.
They can then spend that money on the Store for whatever they want, be that a game, DLC, whatever.