Utilizing ATM’s to get euro’s

You should get a better rate from the ATMs in Italy. Use your debit card, and opt for your own bank's conversion, not the one offered by the machine.

For years, on and off, I've been tracking both the discount rates charged by banks over here and at ATMs over there for euro. The discount rate is what % the bank charges for the transaction. So, at a rate of 5%. if you get $95 worth of euro, and the bank will charge you $100.

The best rate I've seen for euro obtained from banks over here is about 5% (most banks set their exchange rate for the day early in the morning, so as the international rate changes, their discount will go up or down a little).

Over there, depending on your card, you might be charged zero percent at an ATM. Most US credit unions charge 1%, a lot of US banks charge 3% (First bank charges $5 per transaction. My limit per transaction has always been $500; I don't know if I can up that, but $5 for ~$500 is ~1%).

Make sure the ATM in Europe doesn't try to charge you "dynamic currency conversion" (i.e., charge you in $ at their conversion rate).

Thoughts to consider. It will cost a little more to get euros from your local bank before you leave, but the extra cost is very low and is nothing compared to the total cost of the trip. Getting local currency at home has a number of upsides. You don't have to search for an ATM, stand in line to use it, and hope it works as malfunctions do happen. All of which are somewhat stressful - especially when you are tired, sleepy, jet lagged, and on new turf. Not saying you should get a huge amount in the U.S., but at least enough to get you started and take care of the first driver if you are being picked up at the airport.

Not saying you should get a huge amount in the U.S., but at least
enough to get you started and take care of the first driver if you are
being picked up at the airport.

So, when you come back, if you think you'll return, bring back enough to start your next trip.

I've been doing that since Germany used DM, back when the dollar equivalent of the euro was $0.89.

Are there any currency exchange businesses near you?
When I need foreign currency, I always go to one of those instead of a bank before I leave on a trip.
They have much better rates as they deal in larger amounts, sometimes, than banks.

The better rate is at ATMs in Italy. But if you want 100€ or so just for the first day when you first get there, get some from your bank at home, that way you don’t need to look for an ATM right away. It will cost you a bit more but on 100€ the commission won’t be much. Then once you are there there will be plenty of banks ATMs in Italy where you can withdraw cash. Make sure you use ATMs attached to bank branches (they are part of the Bancomat network, and in fact in Italian they are called Bancomat). Don’t use the ones that say ATM and are usually attached to souvenir shops or other tourist traps. Those are managed by Euronet Worldwide, a global financial company based in Kansas, and have huge commissions. Don’t use those, they are a ripoff. Use the Bancomat machines at a bank.

Generally better just to use an ATM there, but first you need to understand what your bank charges for using your card overseas. Some, usually the big ones, charge both an out of network fee and a Foreign Transaction fee, which on an equivalent $200 withdrawal, can run $11, or 5.5%. In that case, if the bank offers euros for 5% over interbank exchange rate, it costs you no more to get them here, less if the ATM there also charges a fee. However, if you get 100's of euros here, then you have the risk of loss having to carry them.

If you have a card that offers "No Fees" (except for the ~1% or so clearing house fee) then just get them there.

FWIW, your drivers are pushing cash to avoid taxes, not just to tempt you with a discount because it is easier.

I was told it’s better to exchange money before leaving for a better exchange rate.

Actually it's just the opposite.

Without question, the best exchange rate will be a debit card at a bank owned ATM in the country you are visiting. Absolutely -- guaranteed. Sometimes others will claim they can do better in the US but I have never seen that proven.

The best rate I get is through a bank ATM. I use a Fidelity debit card from a small "travel account" that has no foreign transaction fees. There will always be foreign exchange rates.
But if I need 500+ € or £ for B&Bs on the first day, I buy the money from my BAC account (wear your money belt from after TSA to your destination so your money arrives with you.) Since I have status at BAC, albeit at the low end, I get a discount on the exchange rate. I do not want to find an ATM when I'm jetlagged, hunt for a bank affiliated ATM or withdraw "at lot of cash" when I'm travelling solo.
Remember that non-bank affiliated ATMs, e.g. Euronet, Travelex, will change you a higher exchange rate. They can be sneaky and look like bank ATMs, even situated next to a bank.

Remember that non-bank affiliated ATMs, e.g. Euronet, Travelex, will change you a higher exchange rate

This is incorrect, all ATMs have the same exchange rate for an ATM transaction with your bank, because the network your bank uses determines the exchange rate.

The only thing of concern is if you opt for DCC, and of course a use fee, but then many bank affiliated ATMs will also offer DCC and may charge a fee.

Source: Have used Euronet, and Travelex ATMs a number of times, with no greater charge.

Remember that non-bank affiliated ATMs, e.g. Euronet, Travelex, will change you a higher exchange rate. They can be sneaky and look like bank ATMs, even situated next to a bank.

A valuable warning. As Rick Steves himself writes

Avoid "independent" ATMs, such as Travelex, Euronet, Your Cash, Cardpoint, and Cashzone. These have high fees, can be less secure, and may trick users with "dynamic currency conversion." Note that these "independent" ATMs are often found next to bank ATMs in the hope that travelers will be too confused to notice the difference. Their machines may even have signs that scream "Free Cash Withdrawals" — don't believe it.

https://www.ricksteves.com/travel-tips/money/cash-machine-atm-tips

Anytime I’ve withdrawn cash in Europe on vacation, and I haven’t done that since 2023, my American bank has always either not charged me the foreign ATM fee or reversed the charges. Also I’ve seen people worried about foreign currency charges by American banks when using debit or bank credit cards. I’ve only got a debit card at the moment and the foreign currency charges that my bank charges are negligible with them being $0.03 per transaction. Yes, ¢3 per transaction. So, unless you have more than a thousand purchases on vacation I wouldn’t worry.