What does Matthew 5:7 mean?

Jesus continues to identify those who are truly blessed. This list is commonly referred to as the Beatitudes. Jesus' claims are surprising from a worldly perspective. Instead of declaring that the rich, the beautiful, or the victorious in war are those who have been blessed, Jesus has described as blessed the poor in spirit, those who mourn, and those who are meek. In every case, their blessing comes from the ultimate source of all blessing, which is God. Their status as "blessed" is based on God's response to these humble attitudes.

Now Jesus adds the merciful to those who should see themselves as blessed. Why? They, too, will receive mercy. Jesus is most likely referring to receiving mercy from God. Generally, it is the character of God to show mercy to the merciful (Psalm 18:25). The reverse should also be true but it's not always the case. Those who have received mercy from God ought to be merciful to others (Ephesians 4:32).

Again, Jesus likely has in mind the kingdom of heaven as He speaks. Those who are merciful now, He says, will receive mercy from the king of heaven when He takes the throne. His meaning is not that a person must be merciful in order to be saved, but that those who submit to God in salvation will naturally respond with an attitude of mercy towards others.