Crossbreeds
Some ungulate species can crossbreed with one another. The resultant offspring are sterile, if viable at all, but it is within the realm of possibility. Crossbreeds between more distantly related- or functionally unrelated- species are impossible, however. Their genomes are too different to even result in a zygote, let alone an embryo, fetus, or child. Even ungulate crossbreeds experience complications, and have a high chance of natural abortion or stillbirth.
While merfolk appear to be very similar at a cursory glance, and do share significant recent evolutionary history, their internal structures are too different to produce viable crossbred offspring. If a zygote is formed, it usually terminates within the first 5 weeks of gestation, basically falling apart due to an inability to form a properly functioning skeletal system. Because this is the main barrier to survival, a nix-iaran cross is theoretically possible, but with such a low, random chance of the necessary gene expression required, it is extremely unlikely.