On a recent summer day, as Steffen Kaplan strolled down a New York City street looking for lunch, he grew frustrated: The first three places he looked at were cashless,

On a recent summer day, as Steffen Kaplan strolled down a New York City street looking for lunch, he grew frustrated: The first three places he looked at were cashless, which meant his dollar bills were no good.

Kaplan avoids using credit cards to prevent overspending. 'It's a great formula for staying out of debt,' he says.

But it was not a great formula for satisfying his hunger. And the more he thought about it, the more frustrated he grew that eateries were declining to accept cash.

'I don't think it's cool that you walk into a place and can't buy anything,' says Kaplan, a social media visual consultant.

As a small but growing number of retailers opt to go cashless, not everyone is happy. Some consumers, like Kaplan, prefer using cash, whether as a method of budgeting, to avoid debt, or because they don't have a credit or debit card. As a result, there's a growing rift between promoters of cashlessness, which includes the digital payments industry, and those who say cash should still be king.

The appeal of going cashless

Consumers who carry no cash can enjoy some benefits. Among them: faster checkout, the ability to earn credit card rewards, and avoiding loose change.

These shoppers are finding receptive retailers. One Starbucks store in Seattle where the coffee chain often tests new concepts is cashless. Sweetgreen, a salad chain, is cashless everywhere except Massachusetts.

Some merchants that have gone cashless say it saves time and money.

Dos Toros, a taqueria with 18 locations in New York and Chicago, stopped accepting cash earlier this year. Co-founder Leo Kremer says that saves his store managers about two hours a day " time they can spend out on the floor instead of counting cash, writing deposit slips and setting up the cash drawer. That extra set of hands also helps employees get home on time because more people can help close.

'People don't realize how much time is spent on cash handling and management,' Kremer says. 'Prior to going cashless, the manager was in the office managing money at the end of a shift, and now, they are out front with the team " it's better energy,' he adds. He was also glad to remove the robbery risk that comes with storing cash on the premises.

Kremer says that while he does pay credit card processing fees, he calculates that with the savings on manager time and other costs of handling money, the switch did not cost his company money.

Not everyone benefits

The downside to cashlessness includes potential bias against consumers who don't regularly use plastic. Steve Brobeck, senior fellow at the Consumer Federation of America, a consumer advocacy group, says retailers who refuse to accept cash discriminate against consumers who don't have access to credit or debit cards or those who choose not to use them.

'Low- and moderate-income consumers are most likely not to have a credit or debit card and also most likely to need to use cash to discipline spending,' Brobeck says. He supports efforts to pass regulations " which have been introduced in several local legislatures " that would prohibit retailers from going cashless.

J. Craig Shearman, vice president for government affairs public relations at the National Retail Federation, says there's another reason consumers should resist the cashless trend: 'The swipe fee that the card companies charge the merchant averages 2 to 3% of the transaction, and that gets passed on to consumers.' He estimates it adds up to over $400 for the average family each year.

But Kremer says no costs have been passed on to Dos Toros customers as a result of going cashless. 'Between armored cars, buying change, and time spent on counting and recounting, cash costs about as much as a card swipe fee,' he says.

Boon for business?

According to calculations by Visa, which makes money from digital payments, small and midsize businesses spend 57% less to process digital payments compared with processing cash, checks and money orders.

'By taking cash out of the equation, they can serve more customers,' says Andy Gerlt, senior director at Visa. That's especially important, he adds, for restaurants that experience busy times like a lunch rush. He also says customers tend to spend more when they use cards instead of cash.

Consumers still have options

Kremer says he may have lost a few customers over Dos Toros' switch to cashlessness, but that most were already using credit or debit cards to pay.

For now, it's up to consumers to decide whether they want to frequent cashless stores. If they prefer to use cash, they can keep walking, like Kaplan did. On his fourth stop, he found a falafel shop that was happy to accept his dollar bills.

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Kimberly Palmer is a writer at NerdWallet. Email: kpalmer@nerdwallet.com. Twitter: @kimberlypalmer.