We went to Italy for two weeks last year and yes it is customary to tip the guides. I double checked with my travel agent. We did many excursions and some food/history tours and tipped the guides each time. We did mostly private tours and if I recall, we tipped at least 20 Euros. For our group food tours, it was about 10 Euros. Of Course it was in cash.
I always get about 100 Euros from my bank before I go, and use Bank ATMs when I get to Europe. I use a Capital one card and opened a bank account with them just to use when I travel. I have gotten charged local bank transaction fees, but not fees for exchanging money.