All of us are using SMS in our day to day life for communication. Unstructured Supplementary Service Data (USSD) is high speed interactive communication service available in GSM network. This is similar to SMS but with the absence of store and forward mechanism(that is no SMSC involved for transaction). The USSD can even maintain a interactive session, which is the major advantage of USSD with SMS.
An example of service is bill status on your mobile. In Airtel mobile when we dial *121# the balance or bill will be displayed as a flash sms.
We can develop lots of applications using USSD. Lot of companies already developed application using USSD. Mobile payment solutions are one among them. Another application is availability checking of varies service like railway tickets, air tickets etc. The main advantage of using USSD is it will work in all GSM phones.