Demand for payment confused Enid in NZ city (7)
I believe the answer is:
dunedin
'city' is the definition.
(I've seen this before)
'demand for payment confused enid in nz' is the wordplay.
I cannot really see how this works, but
'demand' could be 'dun' (dunning is a kind of demanding) and 'dun' is found in the answer.
an anagram of 'enid' is 'edin' which is present in the answer.
This accounts for all the letters.
This explanation may well be incorrect...
Can you help me to learn more?
(Other definitions for dunedin that I've seen before include "Antipodean seaport" , "Otago port" , "New Zealand port" , "NZ South Island port" , "New Zealand location" .)