The merchant allows you to spend virtual gold (You get 50 gold every week) on cards or packs for a personal collection, which can be viewed in the Deck Builder by switching All Cards to My Cards. Originally, this collection was used in specific "My Cards" Leagues, however these have not been running for quite some time due to a bug on Gemp. Resultantly, the Merchant is not really necessary for any features on Gemp, although you can use it to emulate a "collecting" experience, if you wish.
I do believe there are tournaments that use My Cards as well, but I don't think they are very popular.
It is worth noting that it is possible to pull artwork from packs in the merchant that you do not have access to in "All Cards". Cards such as
Hobbit Sword have many reprints, but only the first one is used for All Cards, and there are also Masterworks cards in the later sets which have different border colours to the usual cards (E.g.
Eomer, Horsemaster (O)). These can be found randomly in the booster packs for the set they were released in.