Reduce uses a function with two arguments to which it applies the previous result and the next element of the vector. Therefore, you need a function of both x and y:
Reduce(function(x,y)paste0(x,"*",y),c(1,2,4,5))
#[1] "1*2*4*5"
As an aside, you can provide an initial value to be applied as x for the first element of the vector with init =.
Reduce(function(x,y)paste0(x,"*",y),c(1,2,4,5), init = 0)
#[1] "0*1*2*4*5"
One thing you may have tried was this:
Reduce(paste0("*"),c(1,2,4,5))
#[1] 40
This applies the multiplication operator to x and y, because paste0("*") evaluates to "*".