UE4 doesn't properly import transparent PSD files

So this seems to be a common problem when working with pngs and other formats, but it shouldn’t be a problem for PSD files.
Here’s the file in PS:
And what it looks like in UE4:

Notice the white halo.
Is there some setting that needs to be changed or is this just the way it works?

This is a common problem with texture interpolation, the simple fix is to make your entire image red and cut the circle out using transparency.

I understand that this happens when using pngs, but this is the original PSD.
So I don’t think that it has to do with interpolation, I think it has to do with the import process.

In Unity for example the exact same PSD imports with the correct colour and no white halo.

Recomendation is to use either TGA or PNG formats, TGA you can control the background color correctly since transparency is in the alpha channel, but I think even PNG does a better job

You have to keep extra files, and do extra work every time you make a change - it’s completely unnecessary and time consuming.
And, I’m no expert, but I don’t think this a limitation of the Photoshop format, the information is definitely there, it’s just that the editor isn’t importing it correctly.

Surely working with transparent PSDs is pretty common, I’m really surprised that this is a problem.

Try changing Filter to nearest in imported texture settings

I tried it but there’s still a white halo.

Seems like UE4 bakes white color into the background if you’re using transparency from image itself(Like PNG) instead of using alpha channel…
I think the most straightforward workaround for now is to use proper alpha channel within your PSD file and black background. Of course it’s not a perfect solution and I think I’ll post about this issue on answerhub

Plus one for PNGs. I really try to only keep psd files as a backup

I thought that might be the case. I was hoping though that by some chance there was a simple setting that I was missing.
Could you post a link to the answerhub issue when you create it so I can add my vote.

Don’t you find this to be unnecessary extra work? You have to flatten out all your layers, copy the alpha, save the new file, etc. Most of it can possibly be automated with an action, but you still have to do some extra steps every time you make a change.

@cmann I find it simply, more convenient. Plus, psd files are not used by other’s except adobe. There are people here who use gimp and krita…

OK thanks. I guess I’ll just stick with exporting png files for now.