This paper presents an innovative contactless palm vein recognition system. We design a hand sensor that could capture the palm vein image using low-resolution web camera. The design of the sensor is simple and low-cost, and we do not need to install specialized infrared sensor. We allow subjects to position their hands freely above the sensor and they can move their hands during the acquisition process. In order to obtain clear image of the palm vascular pattern, we propose a novel image processing technique called local-ridge-enhancement (LRE). The proposed method removes illumination error while keeping good contrast between the vein and the surrounding tissue. Apart from that, we present a new way to evaluate the image quality. Sometimes, the vein image does not appear clear due to the medical condition of the skin (like thick fatty tissue obstructing the subcutaneous blood vessels) and other environmental factor. These types of images are not suitable to be used for processing in our system. Therefore, we introduce the image quality checking procedure to evaluate the quality of the image before accepting it into our system. The proposed methodology improves the overall performance of the palm vein recognition system.