As per your requirement, you need to make merchant as the owner of the relationship. merchant should have auto generated primary key.
and merchantsettings should have a primary key which is the foreign key from merchant table.
so if above understanding is correct here is the mapping for you
merchant.hbm.xml
<hibernate-mapping package="com.kb.model">
<class name="Merchant">
<id name="id" column="id">
<generator class="identity" />
</id>
<property name="name" column="NAME" />
<one-to-one name="merchantsettings" cascade="all"/>
</class>
</hibernate-mapping>
merchantsettings.xml
<hibernate-mapping package="com.kb.model">
<class name="merchantsettings">
<id name="id" column="id">
<generator class="foreign">
<param name="property">merchant</param>
</generator>
</id>
<one-to-one name="merchant" constrained="true"/>
</class>
</hibernate-mapping>