PNG transparency grid still visible when in PS

I've done this before (albeit I'm only an occasional PS user) and it's been fine, but I am trying to get a transparent png to go over a photoshop background and NOT have the transparent grid showing.

I just am using a trial image to see if it works because it (and others) haven't so far.

I am sure that the background below (which has been intentionally blurred for effect as it won't be the main focus), SHOULD show through, but cannot for the life of me figure out why it won't?

I have tried using a layer mask but that's not too accurate around the edges (and the point of the transparency is so that the edges remain clear).

It MUST be a transparent image, because it's sold as a transparency, so it should work?
It might be a "slap my forehead" moment when someone tells me the solution, but for now I'm totally frustrated after 2 days of trying to get something that should be so simple, to work. 

Thank you in advance!