USSD is used for unstructured data service, between the mobile handset and mobile operator. What is unstructured data means? In telephony protocols, all data formats are defined in specs. E.g IMSI, which is the identity of the subscriber, is well structured in a 3gpp specification.
USSD carries user-entered data to the network node, which can handle the USSD request. E.g Balance check. The user can enter the data for which no format is specified in 3GPP. Because of this, it is called unstructured data.