Compliance3 min readUpdated October 15, 2026

What Are Placement, Layering and Integration?

The three stages of money laundering in the FATF's and FinCEN's own words, with an example for each stage and what they mean for card payments.

Nick Bonnassies, CMO at Tagada · checked against 4 sources

Article summary

TL;DR

Placement, layering and integration (PLI) is the three-stage model of money laundering described by the FATF and FinCEN. Placement puts criminal proceeds into the financial system. Layering moves them through conversions and transfers to distance them from their source. Integration brings them back into the legitimate economy, for example through real estate or a business.

The FATF describes three stages: placement introduces illegal profits into the financial system, layering distances them from their source, integration returns them to the legitimate economy.
FinCEN uses the same three steps and says money laundering "typically" involves them. Real schemes can skip or merge stages.
Splitting cash into small deposits is a placement method. In the US, doing it to evade the cash report is the crime of structuring.
In card payments, Visa calls processing sales that are not a real deal between the cardholder and the merchant "laundering".

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On this page

What placement, layering and integration mean

Placement, layering and integration are the three stages that the Financial Action Task Force (FATF), set up by the G-7 in 1989 to coordinate the response to money laundering, uses to explain how money is laundered. The FATF defines money laundering as "the processing of these criminal proceeds to disguise their illegal origin".1

The US Treasury's FinCEN uses the same model: money laundering "typically" involves "three steps: placement, layering and integration". First the funds are "furtively introduced into the legitimate financial system", then "moved around to create confusion", then integrated "until the 'dirty money' appears 'clean.'"2 The word "typically" matters: real schemes can skip or merge stages, for example when the proceeds are already in a bank account.

The FATF does not put a number on how much is laundered. Its FAQ says precise statistics are not available and "the FATF therefore does not publish any figures in this regard."1

The three stages, in the FATF's words

Stage	What happens	Example given by the FATF
Placement	"The launderer introduces his illegal profits into the financial system"	Breaking large amounts of cash into smaller sums deposited into a bank account, or buying money orders and cheques deposited elsewhere
Layering	"A series of conversions or movements of the funds to distance them from their source"	Buying and selling investments, wiring funds through accounts at banks around the world, disguising transfers as payments for goods or services
Integration	"The funds re-enter the legitimate economy"	Investing in real estate, luxury assets or business ventures

Source: FATF FAQ, "How is money laundered?"1

The FATF adds that each stage tends to happen in a different place. Placement usually happens close to the crime, often in the country where the money comes from. For layering, launderers may pick "an offshore financial centre, a large regional business centre, or a world banking centre". Integration can then happen somewhere else again.1

Where payments fit, and why providers care

Two payments examples map directly to the stages:

Structuring cash (placement). Splitting cash so no deposit triggers the US currency transaction report is a crime under 31 U.S.C. 5324.3
Card transaction laundering (layering). This is the card version of disguising transfers as payments for goods or services. Visa can ban a merchant for "presenting Transaction Receipts that do not result from an act between a Cardholder and a Merchant or Sponsored Merchant (laundering)" (section 1.9.1.4).4 Fake businesses that apply for merchant accounts to do this are covered in application fraud.

Visa also requires each member bank to keep an anti-money laundering program "reasonably designed to prevent the use of the Visa system to facilitate money laundering" (section 1.9.1.7).4 That is why acquirers and payment providers run know your customer checks before onboarding and ongoing monitoring after it, and file a suspicious activity report when activity does not match a merchant's profile. For the merchant side of these controls, see our guide to payment risk management.

How Tagada helps

Underwriting that follows the card network rules

Tagada follows Visa and Mastercard rules and the laws that apply to payments. Each file is still underwritten, with enhanced review on regulated verticals. Some businesses are refused, such as those using falsified documents, selling counterfeits, circumventing chargebacks, using deceptive trial or subscription marketing, or listed on MATCH.

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Updated on October 15, 2026

Nick Bonnassies

CMO at Tagada

CMO at Tagada. Before Tagada, Nick built direct-to-consumer brands that generated over $115M in sales, raised over $25M in crowdfunding and sold two of them. He also works as a fractional CMO on marketing operations and AI systems.

Frequently asked questions

What is the FATF's official description of placement, layering and integration?

On its FAQ page, the FATF says that in placement "the launderer introduces his illegal profits into the financial system", that in layering "the launderer engages in a series of conversions or movements of the funds to distance them from their source", and that in integration "the funds re-enter the legitimate economy". The page is on fatf-gafi.org; we quote the Wayback Machine copy of October 10, 2026.

What is an example of layering in AML?

The FATF gives three: buying and selling investment instruments, wiring the funds "through a series of accounts at various banks across the globe", and disguising transfers "as payments for goods or services" so they look legitimate. FinCEN describes the same step as money "moved around to create confusion, sometimes by wiring or transferring through numerous accounts".

What is integration in money laundering?

Integration is the last stage, where the laundered funds "re-enter the legitimate economy", in the FATF's words. Its examples are investing in real estate, luxury assets or business ventures. FinCEN says the money is integrated "through additional transactions until the 'dirty money' appears 'clean.'" At this point the funds look like ordinary income or assets.

Sources

Checked October 15, 2026

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