See: SIM Application Toolkit (SAT) Forum

SIM Toolkit is an ETSI/SMG standard for Value Added Services and e-commerce using GSM phones to do the transactions. 

You will be able to check your bank account and pay bills using your SIM Toolkit-enabled phone with an appropriate SIM Toolkit-specific SIM card which will provide much of the intelligence to conclude a transaction over GSM.

How does it work? 
SIM Toolkit programmed into the special GSM SIM card essentially enables the SIM card to drive the GSM handset interface, build up an interactive exchange between a network application and the end user and access or control access to the network. For the first time the SIM card has a proactive role in the handset. This means that the SIM initiates commands independently of the handset and the network.

The SIM Toolkit Standard
Smart Card developers like Gemplus have contributed over the years to the evolution of the ETSI standards for SIM cards. SIM Toolkit is the result of the SMG9’s work on the role of the smart card in the mobile handset. In 1995, the first ideas and draft documents were specified, resulting in 1996 with the standardization of SIM application Toolkit as an ETSI (European Telecommunications Standard Institute) standard: GSM 11.14.

Since then, real life services have been launched with telecom operators:

The first SIM Toolkit application was the Cellnet/Barclaycard remote banking service launched in May ’97 on GemXplore SIM cards. In 1997, the Telia/PostGirot remote payment service was also launched on GemXplore SIM cards, and in June ’98 SmarTone Hong Kong launched the first Asian SIM Toolkit information service on GemXplore cards.

See: SIM Application Toolkit (SAT) Forum

Swedish Example

Here's how it works in Sweden....

• A specific PIN code must be entered in the GSM phone to start the application
  
  

• The user then enters the Postgirot account number, the date and the amount payable.   
  
  

• The SIM will then package this information into a Short Message Service (SMS)
  
  

• The user can add a comment to recognize the payment in a future statement.
  
  

• The card then automatically calculates an electronic signature with a dedicated algorithm. 
  
  
• This SMS is sent to Telia's Short Message Service Center (SMSC) and processed by Postgirot's SmartSec system 
  
   
• Once it has been processed, SmartSec returns an acknowledgement to the user to confirm payment
  

The following standards are the most commonly used to develop SIM Toolkit applications. 

The GSM 11.14 standard has evolved with the rest of the GSM standards. Each year, the ETSI issues different releases of the Phase 2+ standard. Each release corresponds to the SIM phases: 

Release 96: Phase 2+ V5
Release 97: Phase 2+ V6

The standard is constantly evolving and will continue to evolve as a GSM phase 2+ feature (new commands, new features, new handsets, new market opportunities).

The 11.14 standard is a feature of the Phase 2+ specification.

• GSM 02.17 Release 98 V7.0.0 SIM, Functional Characteristics
• GSM 03.48 Release 97 V6.1.0 SIM Application Toolkit Security
• GSM 11.11 Release 98 V7.0.0 Specification of the SIM-ME Interface
• GSM 11.14 Release 98 V7.0.0 Specification of the SIM-ME Interface for SIM Application Toolkit

SIM Toolkit Features:

SIM Toolkit features can be classified into different categories:

• Control of the Man-Machine Interface
• Communication services
• Menu management and application control
• Accessory management
• Miscellaneous
  
  

SIM Toolkit defines how the card should interact with the outside world and extends the communication protocol between the card and the handset. For the first time: the card has a proactive role in the handset (this means that the SIM initiates commands independently of the handset and the network).