This Diagnostic Study shows that Peru has a powerful opportunity to drive financial inclusion and continue modernizing its economy through further reforms to support digitization of payments. Despite this, Peru still has a large shadow economy, and remaining disparities of economic opportunity across the country. The Diagnostic Study maps out the key barriers to a more inclusive digital ecosystem in Peru, and makes specific recommendations at the national and sub-national level so Peru can harness the power of digital payments to build on its recent economic achievements.