A new gifting service called Steam Digital Gift Cards is now available on Steam. As the name suggests, it's basically a hybrid of physical Steam gift cards and the existing gifting system that enables users to put funds directly into the Steam Wallets of people on their friends list.
Digital gift cards "expands on Steam's single-game digital gift service and the tangible Steam Gift Cards" which can be purchased at various retail outlets. To send them, log into your Steam account and head to the Digital Gift Cards page. Select your amount, from $5 to $100, and the recipient. Personalize it with a message, select your pay type, and you're on your way.
The new gift cards can be used to purchase anything on Steam, including games, microtransaction items, hardware, and stuff on the Community Market. Valve said the new setup is not going to replace the existing gift system, but will instead be the sort of thing you can give when you really don't know what the person wants—basically the same as conventional gift cards.
A few points of note: Digital gift cards are only available in preset amounts, and purchases are localized to the gifter's currency and then converted for the recipient—so if, for instance, I spend $100 CDN on a gift card, James will get about $80 US when I send it to him. (Which I am not actually going to do. Sorry, James.)
You can only send digital gift cards to people who have been on your friends list for a minimum of three days, and you cannot use your own Steam Wallet funds to pay for them—PayPal, credit card, and Bitcoin are your only options. And if, for some reason, the person you sent the card to doesn't want it, the purchase amount will be refunded, to the original pay type if possible, and to your Steam Wallet if not.