Just by looking at him, you can hear the lines in your head. "What are ya buyin'?" This enigmatic salesman helps you out in your high-priority rescue mission selling you a variety of weapons. Exchanging these guns for the currency of the locals, Pesetas, he keeps Leon constantly supplied with new items. He even has his own side quest, which rewards you with a custom handgun named the Punisher.
While basically an arms dealer, The Merchant can also be considered a character in this world. While he has no official background and was last seen before the final fight of RE4, it's safe to assume he is still out there asking the deep questions like "What are ya sellin'?".
He's iconic for his catchphrases and odd shop locations. A cave, of all places, has to be the worst for flow of customers. I can only imagine what Resident Evil 4 would have been like without him.
Image Source: Resident Evil 4 Wiki